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CME Group exec sees 'very good' demand for bitcoin futures

As its launch of bitcoin futures contracts nears, CME Group Inc. anticipates "very good" demand from market makers, hedge funds and asset managers, one executive said.

On Dec. 1, the U.S. Commodity Futures Trading Commission did not object to CME's or Cboe Global Markets Inc.'s plans to launch bitcoin futures.

Asset managers are "excited" for the possibility that bitcoin futures could lead to exchange-traded funds, Sean Tully, CME's global head of financial and over-the-counter products, said Dec. 5 at the Goldman Sachs U.S. Financial Services Conference. CME is offering transparency in terms of investment in a safe, highly regulated marketplace, he said, adding that because the transactions are cash-settled, investors do not have to understand and use blockchain transactions.

Tully said his company uses four different exchanges to gather pricing on actual transactions to price its own product. Alternatively, he said, Cboe has a single exchange from which it will base its prices.

"We believe we'll have much more robust pricing, having it across a number of different exchanges, as well as much higher volumes to base it on," Tully said.

CME plans to launch its bitcoin futures contracts for trading Dec. 18, while Cboe is set to begin Dec. 10.