Bitcoin Futures Crash Over $2000 From Open, Converge To Bitcoin Spot

Update: Bitcoin and Bitcoin Futures have collapsed since the futures opened...

Dropping over $2200 to converge with spot...

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Both CME and CBOE Bitcoin Futures contracts opened above $20,000 this evening (with Bitcoin spot hovering around $19,000). However, as soon as trading started, Bitcoin futures got hammered lower.

 

Those expecting a surge in futs volumes on the CME vs the CBOE will be disappointed:

In fact, spoting actual trades in the first few minutes of trading is not heavy to say the least. Obviously Jan is seeing all the volume...

And March not so much... (let alone the $1200 bid-offer spread)

The lack of trading will likely be a surprise to those who were expecting a more "vigorous" futures launch on the CME, such as Brooks Dudley, vice president of risk in New York at ED&F Man Capital Markets who told Bloomberg that "CME’s bitcoin contract may not be first, but they are a larger futures clearinghouse and we are looking forward to our clients trading their product on Sunday evening. Not all market participants have been able to short the Cboe bitcoin futures. We have allowed our clients to go long or short to take advantage of dislocations between the futures and the underlying spot market.

For now, nobody appears to be taking advantage of anything.

Incidentally, here is the (declining) Cboe XBT futs volumes in the first week of trading.

Finally, for those who missed it, here is JPM's take on CME vs Cboe futs:

  • With CME Bitcoin futures set to begin trading on 18th December, there will be competition between the two exchanges to attract volumes. Similar to the CBOE contract, the CME futures are cash settled, and after reviewing the initial margin requirement ahead of launch the CME raised it this week from 35% to 47% for speculative accounts, modestly higher than the CBOE’s
    44% initial margin requirement.
  • There are some differences in the contracts worth noting, however. The settlement price of the CME futures will be based on a weighted average of prices from several exchanges (including Bitstamp, GDAX, itBit and Kraken), rather than a single exchange. The settlement dates of the CME futures will also extend further ahead to March, June, September and December. These factors, along with the fact that the CME is a larger exchange, could give it an advantage in terms of attracting trading volumes.