A new era kicks off today with the listing of the first bitcoin futures contract on the Chicago Board Options Exchange (CBOE).
In an interview, Edward Tilly, CBOE's chief executive officer, said the exchange may use information gleaned from futures trading to make a case to the Securities and Exchange Commission (SEC) to allow bitcoin-linked ETFs and exchange-traded notes (ETNs).
"All of that information goes into building the next steps," Tilly told CoinDesk, adding:
Talk about a bitcoin ETF by the chief executive of CBOE is notable for two reasons.
ETFs are tradable securities tied to an index, commodity or basket of assets, and are available for purchase by retail investors. Bitcoin ETFs could conceivably be an appealing option for individuals enticed by the asset's price gains, but put off by the hassles and risks of storing and safeguarding it.
But secondly, and perhaps more importantly to the nascent crypto asset industry, this would not be the first stab at a bitcoin ETF.
Earlier this year, the SEC rejected a proposed ETF by Gemini, the bitcoin exchange founded by Cameron and Tyler Winklevoss (which also has a multi-year license from CBOE to provide bitcoin data in the futures launched today). Among other concerns, the regulator cited the lack of other regulated bitcoin products.
Now that a number of bitcoin futures – which are regulated by the Commodity Futures Trading Commission – are live and in the works, that could all change.
In the wake of an earlier effort by a CBOE subsidiary to convince the SEC to reconsider its decision, Tilly said his company will be evaluating data about the settlement process, liquidity, and volatility spikes of the bitcoin futures for possible conversations with the SEC.
In any event, the exchange wants to do more with its new data partner.
"This isn't the end, but rather the beginning of the story of our relationship with Gemini," said Tilly. "We hold that relationship very dear." (Gemini did not respond to emails seeking comment.)
Regardless of whether the SEC proves amenable to re-opening conversations about a bitcoin ETF, there are other business opportunities, according to Tilly.
Following the launch of the bitcoin futures contract, CBOE will take what Tilly called a "measured approach" to initiating other contracts, as it has done after similar launches.
"It's not a month or two" away, he said. "But at some point derivatives on bitcoin will make sense."
Additional business opportunities "down the road," according to Tilly, include the addition of contracts on other cryptocurrencies. As he put it:
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