As the cryptocurrency landscape continues to evolve, the United States is poised to embark on a new chapter with the introduction of “Continuous futures” for bitcoin (BTC) and ether (ETH). This November, Cboe Global Markets, a leading derivatives exchange, is set to launch these innovative financial instruments, pending regulatory approval. This move represents a significant shift in the market, blending the popular features of perpetual futures contracts with regulatory frameworks suitable for U.S. markets.
A New Era for U.S. Crypto Derivatives
Cboe’s Continuous futures aim to mirror the success of perpetual futures, which have thrived on offshore platforms. Unlike traditional futures, which typically expire on a monthly or quarterly basis, Continuous futures extend up to a decade. This long-term horizon alleviates the need for traders to constantly “roll” their contracts into new ones, a process that can be both costly and labor-intensive.
The design of these contracts includes daily adjustments against spot prices through a transparent funding rate mechanism. This feature allows traders to maintain long-term exposure to bitcoin or ether without frequent rebalancing. Essentially, a trader can purchase a Continuous futures contract and hold it for years, cashing in on the crypto’s spot price movements without the hassle of constant contract renewals.
Cash Settlement: A Safer Bet?
One of the standout features of Cboe’s Continuous futures is the cash-settlement mechanism. This means that no actual bitcoin or ether will change hands during the settlement process. Instead, all transactions will be settled in U.S. dollars, with payouts linked to the prevailing spot prices of the cryptocurrencies. This approach potentially mitigates the risk associated with holding and transferring digital assets, offering a layer of security and simplicity.
Catherine Clay, Cboe’s head of derivatives, expressed optimism about the launch, stating, “Perpetual-style futures have gained strong adoption in offshore markets. We expect Continuous futures to appeal to not only institutional market participants and existing CFE customers, but also to a growing segment of retail traders seeking access to crypto derivatives.”
Regulatory Approval: A Crucial Step
Of course, before these Continuous futures can hit the market, they must receive the green light from U.S. regulators. Cboe’s plans hinge on approval from the Commodity Futures Trading Commission (CFTC), which oversees the derivatives market in the United States. The proposed futures will clear through Cboe Clear U.S., a derivatives clearinghouse under CFTC jurisdiction, ensuring that the products align with U.S. regulatory standards.
Securing this approval is paramount for Cboe, as it reflects an effort to bring the benefits of perpetual futures to a broader audience while adhering to the stringent regulatory environment in the United States. The successful introduction of these products could set a precedent for other exchanges aiming to offer similar derivatives within the country.
A Balanced Perspective: Opportunities and Challenges
While the launch of Continuous futures presents exciting opportunities, it also raises questions and potential challenges. On one hand, the extended duration of these contracts offers significant advantages for traders looking to maintain long-term crypto exposure without the hassle of rolling over contracts. It simplifies trading strategies and reduces transaction costs, making it an attractive option for both institutional investors and retail traders.
However, some market participants might be wary of the new product’s complexity and the inherent volatility of cryptocurrencies. Despite the cash-settlement feature, the value of the contracts will still be tied to the often-unpredictable movements of bitcoin and ether prices. This volatility could pose risks, particularly for less experienced traders who might not fully understand the intricacies of the derivatives market.
Moreover, the regulatory landscape itself is in a state of flux. As the cryptocurrency industry continues to grow, regulators worldwide are grappling with how best to oversee and manage these emerging financial instruments. Cboe’s Continuous futures could serve as a test case, influencing future regulatory decisions and shaping the trajectory of crypto derivatives in the U.S.
Looking Ahead: November’s Launch and Beyond
As the countdown to November 10th begins, all eyes are on Cboe and the potential that Continuous futures hold for the U.S. market. If successfully launched, these products could revolutionize the way traders interact with crypto derivatives, offering a blend of long-term stability and regulatory compliance that has been elusive in the past.
For now, the crypto community waits with bated breath, eager to see how this new chapter unfolds. Whether Continuous futures will live up to their promise and reshape the landscape remains to be seen, but one thing is certain: the world of crypto derivatives is on the brink of a significant transformation, and the U.S. is ready to play a pivotal role in its evolution.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
