No, CME Did Not Shut Down Bitcoin Derivatives Market

Following an announcement from CME Group yesterday, some might get confused that the major derivatives market would shut down trading in bitcoin (BTC) futures & options, along with trading in other assets. Fortunately, this is not the case.

What CME really said was that their “Chicago trading floor” would close for business as a precaution to prevent the spread of Coronavirus. However, it also added that “all products will continue to trade on CME Globex as they do today.”

CME Globex is CME’s electronic trading system where futures and options on all assets offered by the exchange are traded on a daily basis by the majority of market participants.

The only thing that is closing, is, in other words, the floor where old-school floor trading takes place. In practice, this only represents a tiny share of the total trading activity nowadays, although it used to be where all trading happened before the digital age. CME is one of just a few exchanges in the world where floor trading is still practiced to some extent.

According to CME, the closing will be effective as of this Friday “at the close of business.”

The statement from the marketplace also said that no Coronavirus cases have been reported so far on their Chicago trading floor, while adding that a future reopening “will be evaluated as more medical guidance on the coronavirus becomes available.”

The news that the CME would close its trading floor was widely reported by news outlets such as CNBC, which noted that the closing makes CME “the first major U.S. exchange to close a trading floor” due to the Coronavirus. It added that the New York Stock Exchange (NYSE) is also taking some precautionary measures as it works to “separate traders and other employees.”

Meanwhile, CME also said on Wednesday that interest in bitcoin futures trading on the exchange has continued to rise in February, as market participants look to “hedge bitcoin price risk” amid “continuing uncertainty in global markets.”

“For the first time since the launch of CME Bitcoin futures, monthly average daily volume (ADV) exceeded 10K two months in a row, averaging 10.5K contracts YTD, up 119% YoY. Open interest (OI) reached an all-time high of 6,621 contracts (33.1K equivalent bitcoin) on February 19,” the exchange said, adding that interest in the newly opened bitcoin options market also rose during the month.