Derivatives exchange CME is expanding its crypto futures offerings with new euro-denominated crypto derivatives.
The new products, which are expected to go live on August 29, will reference bitcoin and ether and will be similar to the exchange’s existing dollar-denominated crypto futures.
“Continued uncertainty in the cryptocurrency markets, coupled with the robust growth and deep liquidity of our existing bitcoin and ether futures, is creating greater demand for risk management solutions from institutional investors outside the United States” , said Tim McCourt, CME’s global head of equity and currency products.
“Our Bitcoin Euro and Ether Euro futures contracts will provide clients with more accurate tools to trade and hedge exposure to the two largest cryptocurrencies by market capitalization.”
McCourt said that by 2022, EMEA would account for 28% of exchange-traded bitcoin and ether futures contracts and that euro-denominated cryptocurrencies were the second most traded fiat after the dollar.
Despite the ongoing crypto winter, many companies have continued their expansion of digital assets. On August 4, BlackRock partnered with crypto exchange Coinbase to allow asset managers to trade crypto through its Aladdin investment management system. The day before, Revolut announced it was offering the trading of 22 new digital tokens and in May, Nomura said it was launching a new digital asset company.
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However, most institutional investors cannot trade cryptocurrencies in the spot market. Instead, they rely on derivative products for exposure. McCourt had previously told Financial News that crypto trading volumes on the CME were often equal to, if not greater than, most crypto exchanges.
European crypto market participants have welcomed the new CME offerings.
“The launch of CME Group euro-denominated bitcoin and ether futures will help meet the growing demand for regulated and robust non-USD crypto derivatives,” said Edmond Goh, head of trading at B2C2, a market liquidity provider cryptographic
Sam Newman, head of digital asset broking 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 accessibility and utility of cryptoasset derivatives, particularly in Europe,” he said.
The 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, averaging 57,000 daily.
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