Derivatbørs CME is expanding its future crypto offerings through new euro-denominated crypto derivatives.
The new products, which are expected to go live on August 29, will reference bitcoin and ether and be similar to the exchange’s existing dollar-denominated crypto futures.
“Ongoing uncertainty in the cryptocurrency markets, along with the robust growth and deep liquidity of our existing bitcoin and ether futures, is creating increased demand for risk management solutions from institutional investors outside the US,” said Tim McCourt, global head of equity and currency products at CME.
“Our bitcoin Euro and ether Euro futures contracts will provide clients with more precise tools to trade and secure exposure to the two largest cryptocurrencies by market capitalization.”
McCourt said that by 2022, EMEA accounted for 28% of bitcoin and ether futures contracts traded on the exchange, and that euro-denominated cryptocurrencies were the second most traded fiat after the dollar.
Despite the ongoing crypto winter, many firms have continued with the expansion of digital assets. On August 4, BlackRock partnered with crypto exchange Coinbase to allow asset managers to trade crypto via its Aladdin investment management system. The day before, Revolut announced it was offering trading in 22 new digital tokens, and back in May, Nomura said it was launching a new digital asset company.
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However, most institutional investors are unable to trade cryptocurrencies on the spot market. Instead, they rely on derivative products for exposure. McCourt had previously told Financial news that crypto trading volumes on CME were often on par with, if not greater than, most crypto exchanges.
European crypto market players have welcomed CME’s new offering.
“The launch of euro-denominated bitcoin and ether futures from CME Group will help meet the growing demand for regulated and robust non-USD crypto derivatives,” said Edmond Goh, Head of Trading at B2C2, a crypto market liquidity provider.
Sam Newman, head of digital asset brokerage at TP ICAP, was also excited about the announcement.
“Interest in cryptoassets has seen tremendous growth, and these new euro-denominated futures contracts will help further expand the availability and utility of cryptoasset derivatives, particularly in Europe,” he said.
CME reported that the second half of this year has been a record quarter for crypto futures with an average of 106,000 contracts in open interest. It was also the second best quarter in terms of volume, with an average of 57,000 daily.
To contact the author of this story with feedback or news, email Jeremy Chan
