Cboe CEO: Bitcoin (BTC) Futures Growth Relies on ETN Launches
Ed Tilly, the CEO, president and chairman of the largest U.S. options exchange, Cboe Global Markets (CBOE), believes the growth of Bitcoin (BTC) as an investible asset class is hamstrung by the lack of exchange-traded notes (ETNs) currently available.
At a luncheon on Wednesday, Tilly discussed the current growth of the Bitcoin futures market, indicating that trading activity hasn’t notably increased since first launching, due in large part to a lack of retail investor accessibility.
To help solve this issue, Tilly proposed the idea that more ETNs will need to be launched in order to spur mom-and-pop investors to adopt the leading digital currency.
“The power of having that future there is also having an ETN that is more attractive to retail, and then institutions can lay that risk off on the listed futures market,” said Tilly. “Absent that leg and introducing trackers or notes, I think we will be in this, ‘It trades every day, but it is not the story.'”
Despite the potential of an ETN-filled investment landscape, the SEC has taken a cautious approach to the entire investment class. Last September, the SEC even temporarily suspended the trading of two ETNs, Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF).
Nonetheless, Tilly is adamant that the success of Bitcoin futures is reliant on the adjacent trading vehicles, citing the Cboe Volatility Index (VIX) as an example.
“Why is VIX successful? Really calls upon the pool of liquidity in the S&P 500. Oh, and there is an institutional futures contract that is traded at the CME. There is a most successful ETF, SPDR,” Tilly said. “There are trackers and replicating notes that lever up that exposure. All of that works together.”
This analysis comes the same week as Cboe senior instructor Kevin Davitt suggested that futures trading volatility has steadily been on the rise in 2019. Davitt points to this volatility as an indicator that investors are becoming more comfortable with Bitcoin futures trading in general.
More: Cboe’s CEO says there’s 1 pain point that’s keeping out Wall Street’s billions from the growth of bitcoin
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.