CBOE and Gemini Strike Exclusive Global Licensing Agreement For Bitcoin Data

On August 2, 2017, CBOE Holdings Inc. struck a multi-year deal with Gemini Trust Company LLC to use bitcoin market data. Pending CFTC review, the collaboration begins with plans to launch cash-settled bitcoin futures in the fourth quarter of 2017.

Today, August 2, 2017, CBOE Holdings Inc. (CBOE) announced an exclusive global licensing agreement to use bitcoin market data from Gemini Trust Company LLC (Gemini). The multi-year agreement “provides [CBOE] and its affiliates with an exclusive global license to use Gemini’s bitcoin market data for bitcoin derivatives and indices.”

CBOE Holdings owns the Chicago Board Operations Exchange, the Bats exchanges, and CBOE Futures Exchange (CFE). Readers may remember that the Winklevoss Bitcoin Trust ETF (COIN) was due to list on Bats until it was struck down by the Securities and Exchange Commission in March 2017.

Now, CBOE will have extensive access to Gemini’s bitcoin market data, including daily bitcoin auction values. Gemini recently expanded its daily auctions to include Ether. However, it doesn’t appear that CBOE will incorporate Ether futures just yet.

According to a spokesperson for CBOE, the company “will assess new opportunities on a case-by-case basis.” She called Gemini “an ideal marketplace to set the single reference point for the price of bitcoin.”

Pending regulatory review by the Commodities and Futures Trading Commission (CFTC), CBOE and Gemini plan to make cash-settled bitcoin futures available on the CFE. This could begin as early as the fourth quarter of 2017, though launch could be delayed until the following quarter.

It’s worth noting that the CFTC recently approved swap execution facility (SEF) and derivatives clearing organization (DCO) registration for LedgerX. LedgerX, which hopes to begin bitcoin options in fall 2017, is geared toward institutional investors, whereas the CBOE-Gemini collaboration appears more inclusive.

Per Tyler Winklevoss, CEO of Gemini, “By working with the team at CBOE, we are helping to make bitcoin and other cryptocurrencies increasingly available to both retail and institutional investors.”

In light of the bitcoin fork, CBOE also clarified that the plan is to use BTC prices, not BCH.

In a statement, CBOE chairman and CEO Ed Tilly said, “We very much look forward to responding to the growing interest in cryptocurrencies through the creation of bitcoin futures traded on a regulated derivatives exchange, with the many expected benefits that this brings, including transparency, price discovery, deep liquidity and centralized clearing.”