RBC Capital Says CFTC Perpetual Futures Threat to CME and Cboe Is “Manageable” | LeapRate | Online Trading Industry News, Broker Intelligence & Fintech Analysis
RBC Capital Markets moved to calm investor nerves about the competitive implications of the CFTC’s approval of bitcoin perpetual futures, arguing in a note on Tuesday that the risk posed to established exchanges, CME Group (NASDAQ: CME) and Cboe Global Markets (BATS: CBOE), remains “manageable.”
The reassurance from RBC analysts came amid a strong decline in exchange stocks, triggered by the Commodity Futures Trading Commission’s May 29 approval of perpetual futures contracts on bitcoin for prediction market platform Kalshi.
CME shed more than 5% on Monday before a 2.8% decline on Tuesday, while Cboe shed over 9% Monday, with an 8.4% decline on Tuesday as markets fretted that the regulatory green light could eventually extend to other asset classes, including equity derivatives, threatening the core product franchises of traditional exchanges.
RBC attributed the declines to investor concern that so-called “perps” could migrate into S&P 500 and other structured products where CME and Cboe hold dominant positions.
However, the analyst argued that fundamental structural differences between perpetual futures and exchange-listed contracts, coupled with anticipated leverage limits imposed by clearing houses, should contain the competitive fallout.
RBC maintained Sector Perform ratings on both CME and Cboe, suggesting the bank sees limited near-term upside but equally does not view the CFTC move as an existential threat.
