CME Group Rolling Out First Euro-settled Crypto Derivatives

Derivatives marketplace CME Group is set to offer its first euro-denominated bitcoin and ether futures this month after its crypto derivatives posted record open interest volumes during the second quarter.

The upcoming cash-settled products are designed to match their US dollar-denominated counterparts. Bitcoin euro futures are set to be comprised of five bitcoins (BTC) per contract, while the ether euro futures are slated to start with 50 ether (ETH). 

Tim McCourt, CME’s global head of equity and foreign exchange products, said demand for risk management solutions by institutional investors outside the US is increasing as crypto market uncertainty persists. 

Euro-denominated cryptocurrencies are the second-highest traded fiat behind the US dollar, McCourt added. The number of bitcoin and ether contracts traded in Europe, the Middle East and Africa represent about 28% of worldwide totals, he said, which is up more than 5% from 2021.

The upcoming launch comes after CME’s crypto derivatives posted record open interest — an average of 106,000 contracts per day — and higher than average daily volumes of 57,000 contracts during the second quarter. 

In July, daily open interest on the exchange’s crypto products averaged nearly 127,000 contracts, a spokesperson told Blockworks, up 59% from the previous month. Average daily volume on those products was roughly 62,000 contracts — about 11% higher than June. 

CME began offering bitcoin futures in 2017 and went on to add an ether version in February 2021. The company launched cash-settled micro bitcoin futures contracts — worth 10% of one bitcoin — last year and moved in November to add micro ether futures, as Ethereum liquidity grew. 

“At this time, we have no plans to introduce additional products,” a CME Group spokesperson told Blockworks. “We remain focused on continuing to grow our current suite of crypto offerings.”  

Micro ether futures in particular are gaining steam, as more than 3.2 million such contracts have traded in the last eight months, CME Group reported.

Average daily open interest of micro ether futures reached 47,000 contracts in July, while average daily volumes hit nearly 26,000 contracts — up 43% and 41%, respectively, from June.

A CME spokesperson attributed the spike in part to ether’s increasing price, noting that its micro ether contracts settled at $1,014 on June 30. The price of ETH at 3 pm ET was roughly $1,600. 

The representative also called Ethereum’s upcoming Merge, the blockchain’s switch from a proof-of-work consensus mechanism to a proof-of-stake alternative, “one of the most anticipated events in the crypto space to date.” 

The spokesperson said 78% of micro ether options open interest mature in September or December, suggesting traders are hedging risk ahead of the Merge.

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