Exchanges

A European exchange giant is gearing up to jump on the crypto futures bandwagon

Quick Take

  • A European exchange giant is gearing up to launch crypto futures
  • Eurex has been meeting with market makers in recent weeks about the new products, people familiar with the situation tell The Block

Just when you thought there were plenty of markets for crypto futures in the U.S. and around the world, along comes another player.

Eurex, a derivatives exchange operated by Germany’s Deutsche Börse, is gearing up to launch a slew of new futures contracts tied to the digital asset market. The firm follows a number of U.S.-based exchange-operators, including CME and Cboe Global Markets, both of which launched bitcoin futures markets in December 2017. Several people familiar with Eurex’s plans say the firm will announce its plans to launch futures tied to bitcoin, ether, and XRP imminently. In recent weeks, the exchange has been meeting with market-making firms about the products. 

At the same time, a number of new ventures — including Bakkt, Seed CX, ErisX — are aiming to launch markets for physically delivered crypto futures sometime this year in the U.S.

As for Eurex, the firm has had its eye on the crypto market since 2017. As reported by CNBC at the time, executives were exploring crypto futures. 

“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,” a Deutsche Börse spokesperson told German-based publication Wirtschaftswoche in December 2017.

A spokesperson for Deutsche Börse could not be reached for comment. The exchange staffs more than 5,000 and currently operates markets in equities and derivatives.

The market for crypto derivatives has been heating up with names like BitMEX, BitFlyer, and OKEX dominating trading volumes. Meanwhile, a number of crypto exchanges are looking to dive into the market. That’s being driven in part by new demand among traders and market participants looking for more advanced ways to engage with the market. 

“As an ecosystem matures, and as the crypto ecosystem matures, people look for new ways to express a view of the market,” Thomas Chippas, CEO of ErisX said in a phone interview with The Block. 

Binance, a spot crypto-to-crypto market, is eyeing the derivatives market, for instance.

“The space has been moving into this direction for a long time,” said Mark Lamb, CEO of CoinFLEX, a crypto derivatives exchange that launched earlier this year. 

“Traders are all about the efficiency of their capital and maximizing the return on equity,” he said. “Futures just make much higher returns more possible as they are really great for arbitrage and other complex strategies.”