By
Godfrey Benjamin
April 19th, 2024
German stock exchange Deutsche Börse is mulling over the launching of its own bitcoin futures contracts. Due to that Germany will be the first European country to issue bitcoin futures contracts on a regulated trading platform.
On Wednesday German business magazine Wirtschaftswoche reported that executives of Deutsche Börse, stock exchange operator in Germany, are considering launching bitcoin futures contracts and making Germany the first country in Europe to provide futures for the cryptocurrency.
A spokesperson for Deutsche Börse said: “We are thinking about futures, with which private investors and institutional investors can protect existing investments in bitcoin or set for falling prices of the cyber currency.”
The exchange indicated that before making a definite decision on introducing futures contracts some time is needed.
Deutsche Börse Group is one of the largest exchange organisations worldwide. Its service portfolio has a broader basis in contrast to other exchange organisations.
It covers the entire process chain, from the monitored execution of trading orders, clearing, netting and transaction settlement to post-trade custody of securities as well as the necessary electronic infrastructure and the provision of market information.
Deutsche Börse sets standards with its superior risk management and its innovative collateral administration to enable customers to effectively use their capital.
The spokesperson for the exchange commented: “We reflect both the advantages of cryptocurrency derivatives as well as potential issues that need to be addressed.”
These issues included the fact that digital currency technology was still developing, the weakness of bitcoin’s cash market, a lack of regulation and price volatility.
“As a fully regulated exchange, we need to address all of the above and more, before we can launch products,” the spokesperson said.
According to Wirtschaftswoche, the futures contracts will be traded via Deutsche Börse’s Eurex derivatives exchange.
Until recently the only agent to offer such contracts was the U.S. exchange operator CBOE. The market allows CBOE to speculate on the future price of bitcoin without having to directly buy and hold the digital currency.
CME, the world’s biggest exchange group, will start offering Bitcoin futures on Monday as well. Such exchange operator as Nasdaq is expected to list bitcoin futures in 2018.
Japan, the center of the cryptocurrency industry in Asia, is also planning to attract bitcoin futures trading in the near future. The Tokyo Financial Exchange is working to list bitcoin futures products as soon as possible.
Institutional investors have been requiring the ability to gain access to cryptocurrency without the systemic risks of holding the assets directly. Futures can successfully meet this need. And experts believe that development of bitcoin futures will be a significant step toward increasing of institutional money in the cryptocurrency.