By
Temitope Olatunji
April 26th, 2024
CME Group global head Tim McCourt said that there’s a growing demand for BTC and ETH derivative products in Europe and thus it makes sense to bring these products to its institutional clients.
The very popular derivatives marketplace CME Group announced that it will start offering Euro-denominated Bitcoin and Ether futures contracts starting August 29 this month. This could also lead to a major institutional push for crypto in the European market.
Bitcoin and Ether Futures by CME Group
In its announcement on Thursday, August 4, the CME Group said that its Bitcoin futures contracts will be sized at 5 BTC per contract. Similarly, the size of its Ether futures contracts will stand at 50 ETH. Similar to the US market, the Euro-denominated contracts for BTC and ETH will be cash-settled. They will follow the CME CF Bitcoin-Euro Reference Rate and CME CF Ether-Euro Reference Rate. Speaking of the launch, CME Group global head of equity and FX products Tim McCourt said:
“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”.
Growing Demand for Bitcoin Futures in Europe
There’s a growing demand for crypto derivative products outside the US. Following the last bull run, institutional players in Europe have turned very active recently.
Tim McCourt said that CME’s Bitcoin and Ether futures contracts will provide professional traders with precise tools to trade the two largest cryptocurrencies in the world. He also noted that countries in the Middle East, Europe, and Africa constituted a large chunk of the total BTC and ETH futures trading contracts. Tim McCourt said:
“Euro-denominated cryptocurrencies are the second highest traded fiat behind the US dollar. Year-to-date, the EMEA region represents 28% of total Bitcoin and Ether futures contracts traded, up more than 5% versus 2021.”
CME has been actively offering its clients the facility to trade crypto derivative products in the market. It was the first derivatives platform to start trading Bitcoin futures contracts in December 2017. Last year in February 2021, it also started offering Ether futures contracts in the market.
Earlier this year in March 2022, the CME Group started offering crypto investment vehicles including micro BTC and ETH futures contracts. During the second quarter of 2022, the CME Group registered record trading activity for its crypto derivative products. The CME Group traded 10,700 BTC futures contracts and 6,100 ETH futures contracts. During Q2 2022, it also traded 17,400 micro BTC futures contracts and 21,300 micro ETH futures contracts.