The State of the Bitcoin ETF Race

The timeline for approval of the first bitcoin ETF got a little shorter this past Sunday evening as futures contracts based on bitcoin began trading on the CBOE. While trading volume didn’t exactly blow the doors off, the January 2018 contract had a trading volume of about 4000 contracts after roughly the first day, the initial action was relatively brisk for a brand new product. Perhaps the most notable event from the first day of trading was that the January contract price was volatile enough that trading had to be halted multiple times in accordance with CBOE rules. As of this writing, the futures contract price was more than $1000 above the spot price, indicating that traders expect the rally in bitcoin to continue.

What the launch of bitcoin futures does is it puts a more definitive timeframe around the debut of the first bitcoin ETF. I suppose “definitive” may not be the best word to use given that an ETF hasn’t even been approved by the SEC yet, but the bitcoin futures contract gives regulators an underlying asset that they’re likely more comfortable working with in establishing an exchange-traded product.

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