The Chicago-based cryptocurrency exchange Bitnomial has made history by launching futures contracts linked to Tezos's XTZ token, creating the first opportunity for this digital asset to be traded on a US Commodity Futures Trading Commission-regulated platform. This significant development allows both institutional and retail investors to engage with the price dynamics of XTZ using either cryptocurrency or US dollars as collateral. The announcement, made on Wednesday, highlights how these futures contracts enable participants to hedge risks or speculate on price changes without actually holding the underlying asset.
The introduction of regulated futures markets is often seen as essential for attracting broader institutional interest in the United States. These markets provide standardized price discovery and regulatory oversight under the CFTC, paving the way for potential spot exchange-traded funds (ETFs). Michael Dunn, president of Bitnomial, emphasized the importance of these markets, noting, "A CFTC-regulated futures market with six months of trading history meets a crucial requirement under the SEC's listing standards for spot ETFs."
Bitnomial is reportedly exploring new tokens for potential derivatives markets aimed at both US institutional and retail clients, though specific assets have not been disclosed. Previously, the exchange has offered US-regulated futures for various assets, including Cardano (ADA), XRP (XRP), and Aptos (APT), positioning itself as a key player in the crypto derivatives space beyond the dominant Bitcoin (BTC) and Ether (ETH).
Despite its successes, Bitnomial has faced regulatory challenges, particularly with the listing of altcoin futures. In 2024, the exchange attempted to self-certify XRP futures with the CFTC, but encountered resistance from the Securities and Exchange Commission (SEC), which argued that the contracts needed to be registered as securities exchanges. After a legal tussle with the SEC that was later dropped, Bitnomial launched XRP futures in March, reflecting the evolving regulatory landscape around cryptocurrency.
Tezos, known for its innovative blockchain technology, launched its mainnet in June 2018 following a successful initial coin offering in 2017 that raised approximately $232 million in Bitcoin and Ether. As one of the early adopters of proof-of-stake and formal on-chain governance, Tezos allows token holders to vote on protocol upgrades, facilitating network evolution without hard forks.
During the NFT boom of 2021-2022, Tezos gained traction as a cost-effective and energy-efficient alternative to Ethereum for minting and trading non-fungible tokens. This attracted entities like Ubisoft and various artists, who were looking for lower transaction costs. Tezos also established prominent sports partnerships, including with Red Bull Racing and McLaren Racing, and was reportedly involved in a significant sponsorship deal with Manchester United.
Tezos's native token, XTZ, reached an all-time high of $9.12 in October 2021 but has since declined by about 95%, trading around $0.46. Recently, on January 25, Tezos implemented the Tallinn protocol upgrade, reducing base-layer block times to six seconds, marking its 20th on-chain upgrade.
This development reflects Bitnomial's ongoing efforts to expand the scope of US-regulated crypto derivatives, offering new opportunities for traders and investors.