CME hack records crypto derivatives trading in Q2

CME Group’s crypto derivatives posted record high interest rates and higher-than-average daily volumes during the second quarter – even as selling in digital asset markets intensified.

Average daily open interest across the crypto products was 106,000 contracts, a record for the quarter, according to a report published by the derivatives exchange on Wednesday. Average daily volume was around 57,000 contracts – the second highest quarterly total.

Ether futures in particular achieved an average daily volume in the second quarter of 6,600 contracts, a record high that was up 27% from the first quarter. A record 26,500 contracts were traded on 15 June.

During the third week of June, the aggregate number of what the company calls large open interest holders in CME Group’s crypto futures hit a high of 404, signaling growing interest from institutional investors.

A spokesperson for CME Group did not immediately return a request for comment.

Futures contracts are legal agreements to buy or sell a specific asset at a predetermined price at a specified time in the future. CME futures are cash-settled in dollars and are based on a once-a-day reference rate of the underlying asset’s price.

CME began offering bitcoin futures contracts in 2017 and later added ether futures in February 2021. It launched cash-settled micro bitcoin futures contracts — worth one-tenth of one bitcoin — last year and moved in November to add micro -ether futures, as liquidity in ether futures grew.

More recently in March, CME rolled out options on micro bitcoin and ether futures. Tim McCourt, CME’s global head of equity and currency products, said at the time that the new offering would allow traders of all sizes to manage crypto market exposure with more precision.

The first bitcoin futures-based ETFs hit the market last October after SEC Chairman Gary Gensler hinted in August that the agency would be more comfortable with products limited to CME-traded futures contracts. The SEC has yet to approve an ETF that invests directly in crypto.

Simeon Hyman, head of ProShares’ investment strategy group, told Blockworks earlier this month that daily volume in the firm’s Bitcoin Strategy ETF (BITO) has exceeded that of Grayscale Bitcoin Trust (GBTC). He noted that a futures-based ETF is “not at all a second-class citizen” when considering challenges in the spot market.

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