FTX launches bitcoin options

Yesterday, cryptocurrency derivatives exchange FTX launched its previously announced cash-settled bitcoin options. Within 2 hours of launch, FTX CEO Sam Bankman-Fried tweeted that the options hit $1 million in volume, while within 12 hours of launch he tweeted the the options traded about 2,000 contacts. FTX recently received a strategic investment from Binance worth “tens of millions,” and the two are collaborating on a wide range of products and working towards building out their respective token ecosystems.

Why it matters:

• Competition in the derivatives space continues to heat up. CME, who is currently the largest regulated venue for trading bitcoin derivatives in the US, is set to launch its own Bitcoin options contracts today. Bakkt, recently launched their options contracts back in December.
• A more robust derivatives market should improve the price efficiency and liquidity of the underlying spot market, an important step for any regulatory approval on future financial vehicles.