CME launches euro-denominated crypto futures

Derivatives exchange CME is expanding its crypto future offerings through new euro-denominated crypto derivatives.

The new products, which are expected to go live on 29 August, will reference bitcoin and ether and be similar to the exchange’s existing dollar-denominated crypto futures.

“Ongoing uncertainty in 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 by institutional investors outside the US, said Tim McCourt, global head of equity and FX products at CME.

“Our bitcoin euro and ether euro futures contracts will provide clients with more precise tools to trade and hedge exposure to the two largest cryptocurrencies by market cap.”

McCourt said that for 2022, Emea makes up 28% of bitcoin and ether futures contracts traded on the exchange and that euro-denominated cryptocurrencies were the second-highest traded fiat after the dollar.

Despite the ongoing crypto winter, many firms have continued with their digital asset expansion. On 4 August, 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 assets company.

READHow Revolut, Fidelity and Binance are looking to capitalise on the crypto crash

Most institutional investors however are unable to trade cryptocurrencies on the spot market. Instead, they rely on derivatives products for exposure. McCourt had previously told Financial News that crypto trading volumes on the CME were often on par, if not larger than most crypto exchanges.

European crypto market participants have welcomed the CME’s new offerings.

“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, digital assets head of brokering at TP ICAP was likewise excited about the announcement.

“Interest in cryptoassets has seen huge growth, and these new euro-denominated futures contracts will help further expand the accessibility and utility of cryptoasset derivatives, particularly within Europe,” he said.

The CME reported that the second quarter of this year has been a record for crypto futures with an average of 106,000 contracts per day in open interest. It was also the second-best quarter in terms of volume, averaging 57,000 daily.

To contact the author of this story with feedback or news, email Jeremy Chan

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