CME Group to Launch Micro Bitcoin Euro and Micro Ether Euro Futures, Expanding Cryptocurrency Derivatives Offerings

CME Group, a derivatives marketplace, has declared its intentions to broaden its cryptocurrency offerings in the market by March.

CME Group adds Micro-Euro Bitcoin and Ether Futures to derivatives offering.

📅 Last updated: February 20, 2024 16:00 EST | ⏱️ 2 min read

David Pokima

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CME Group, one of the leading financial derivatives exchanges, has announced its plans to launch Micro Bitcoin Euro and Micro Ether Euro futures in March, pending regulatory approval. This move aims to provide investors with additional tools for hedging their exposure to cryptocurrencies and protect them in the market.

As cryptocurrency adoption continues to grow, more and more investors are looking for ways to profit from the top two digital assets. From spot trading to derivatives, cryptocurrency-related products have experienced significant growth since the last quarter of 2023. The introduction of these new derivatives by CME Group reflects the increasing demand for hedging tools among investors.

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CME Group Meeting Investor Needs as Crypto Adoption Soars

In a press release, CME Group stated that the success of their previous cryptocurrency derivatives products led to the proposal of these new offerings. The two derivatives, based on Bitcoin and Ethereum, will give investors greater flexibility in hedging their crypto exposure.

The decision to create Euro-based futures contracts is supported by the fact that the Euro is the second most traded fiat currency behind the USD. The release mentioned that the USD-denominated futures have already been very successful, prompting the need for expansion.

Giovanni Vicioso, Head of Cryptocurrency at CME Group, emphasized the importance of providing market participants with more tools to manage their risk effectively.

“Global investors have sought more precise tools to manage their risk as interest for Bitcoin and Ether grows. As such, we have seen a four-fold increase in volume in our USD-denominated Micro Bitcoin and Micro Ether futures.”

In the European, Middle Eastern, and African (EMEA) markets, CME Group’s Bitcoin and Ether futures volume has accounted for 24% of the total. Vicioso also revealed that the company has plans to further expand their offerings, giving users more options to hedge their portfolios.

TP ICAP Strengthens Partnership

To facilitate the trading of these new products, financial services firm TP ICAP will provide block facilitation services. TP ICAP has been a key partner of CME Group since 2020, offering price discovery and execution services for their existing suite of crypto derivatives.

Sam Newman, the Digital Asset Head of Broking at TP ICAP, expressed the firm’s commitment to connecting market participants and supporting the growth of cryptocurrency derivative products.

“Our global Digital Assets business has been providing price discovery and execution services on CME Group’s suite of crypto derivatives since the start of 2020, leveraging TP ICAP’s strengths in connecting market participants as the foundation for our Digital Assets proposition.”

Newman highlighted the increase in investor interest in cryptocurrency derivatives in recent years. The introduction of the Euro-denominated micro futures contracts by CME Group will further enhance the offerings available to European users.

This development comes at a time when the broader cryptocurrency market is experiencing significant inflows following the approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC). This is expected to drive further institutional interest in the digital asset market.

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Q&A: What You Need to Know

Q: What are micro futures contracts? A: Micro futures contracts are smaller-sized contracts that allow investors to trade assets at a fraction of the size of standard contracts. They provide an opportunity to gain exposure to the underlying asset without the need for a large upfront investment.

Q: Why is the expansion of cryptocurrency derivatives important? A: The expansion of cryptocurrency derivatives offers investors additional options for hedging their exposure and managing risk in the market. It also demonstrates the increasing institutionalization of the cryptocurrency industry and the growing demand for these types of financial products.

Q: How do Euro-based futures contracts benefit European users? A: Euro-based futures contracts provide European users with a more familiar and accessible trading option as the Euro is the second most traded fiat currency. This expansion helps to cater to the specific needs and preferences of the European market.

Q: What impact do spot Bitcoin ETF approvals have on the market? A: The approval of spot Bitcoin ETFs by regulatory authorities, such as the SEC, increases the legitimacy and accessibility of Bitcoin for institutional investors. This approval can stimulate greater market participation and investment, potentially driving up the value of Bitcoin and other cryptocurrencies.

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References: – CME Group Press Release – Cryptocurrency Adoption Grows – Increase in Recent Years – Spot Bitcoin ETF Approvals

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