In a landmark development for the Canadian digital assets market, TMX Group, the largest exchange in the country, is set to launch Bitcoin (BTC) futures contracts on its derivatives trading platform.
As per reports, Montréal Exchange’s (MX) move to launch a Bitcoin Price Index Futures is in response to the growing market demand for this new class of assets.
Bitcoin Futures Trading in Canada
The announcement from the popular exchange starts by saying,
“Montréal Exchange (MX) is launching the Bitcoin Price Index Futures to meet rising market demand for digital cryptocurrency asset classes… Despite growing interest, investors face limitations when evaluating vehicles to manage their exposure to bitcoin price movements.”
The report indicates that many investors are often limited as they look to join the crypto space, especially when managing their exposure to Bitcoin price fluctuations. As such, the network notes that the new Bitcoin Price Index Futures from MX will enable investors to “hedge exposure to Bitcoin spot trading” while exploring other opportunities in the evolving cryptocurrency space.
Moreover, MX noted that this product will provide investors with a gateway for portfolio diversification, real-time prices, liquidity, and active trading. The settlement value of the newly born contracts will be determined through a CoinDesk product, CoinDesk Bitcoin Price Index (XBX).
The XBX will combine a couple of metrics and factors, including the above-mentioned real-time prices from different exchanges, to determine BTC’s most accurate spot price.
Per the network’s statement, the futures contracts will trade on the Montreal Exchange and be cash-settled in U.S. dollars, with the clearance done at the Canadian Derivatives Clearing Corporation (CDCC).
TMX Exchange and Crypto Futures
TMX Group began its journey into crypto some years back. It listed its first Bitcoin ETF in 2021 when crypto assets were priming.
Later, in 2022, rumors were circulating that the network was considering the launch of a cryptocurrency futures product to attract institutional investors.
During those initial stages, John Mackenzie observed that institutional dealers who held significant assets in their portfolios were seeking ways to manage their exposure to price volatility. Notably, the network already boasted 17 crypto-focused ETFs at that time.
More recently, there have been speculations that the platform plans to introduce a crypto spot trading platform as early as 2024.
As the exchange plans to launch its product, it is worth noting that the Canadian spot ETF market has been thriving for years.
This comes even as the immediate neighbors, the USA, and their regulatory watchdogs continue to delay the approval of crypto-focused spot ETFs.