Cboe plans to close its spot cryptocurrency trading platform by the third quarter, and cash-settled cryptocurrency futures will be moved to the Cboe Futures Exchange by 2025.
Cboe said Thursday that it also plans to streamline its digital asset operations. Its digital asset derivatives will be integrated into its broader global derivatives and clearing operations . Cboe said the adjustments are part of a strategic assessment, given the regulatory uncertainty in the digital asset market.
In addition, John Palmer, currently president of Cboe Digital, will head the company’s US derivatives market. He will report to Cathy Clay, executive vice president and head of global derivatives.
Focused concentration on digital assets
The transfer of digital asset derivatives to the Cboe Futures Exchange will provide comprehensive support from the Cboe Global Derivatives division, according to the statement. This support includes global derivatives sales, product development, market structure and investor education.
“Re-focusing our business on digital assets allows us to refine our strategy, leveraging our core strengths in derivatives, technological excellence and product innovation to help maximize opportunities,” said Fred Tomczyk, CEO of Cboe Global Markets.
Tomczyk previously hinted that the company is considering expansion into new markets. It currently has coverage in the US, Japan, Europe, Canada and Australia.
In addition, Cboe said it will maintain the efficiency of its digital asset clearing division, Cboe Clear Digital. It will be integrated into the European clearing house, which will continue to clear Bitcoin and Ether futures.
Cboe expects to save
The closure of the cash market is expected to have a minimal impact on Cboe’s revenues in 2024. The move is also expected to result in savings of $2 million to $4 million this year. Potential annual savings could reach $11 million to $15 million in the future.
The move comes less than a year after Cboe Digital made waves with the launch of margin futures on Bitcoin and Ether. With the support of leading industry players, the goal was to create a one-stop shop for cryptocurrency trading, offering both spot and leveraged derivatives on a single platform.
The focus on a unified experience has helped solidify Cboe Digital as a major player on regulated U.S. cryptocurrency exchanges.
