CME Group announces Ethereum futures product

advertisement

CME Group will list an Ethereum (ETH) futures product next year, the firm said Wednesday.

CME Group, which gate-crashed the crypto derivatives world with a bitcoin futures contract at the height of the 2017 cycle, said on Wednesday — as bitcoin topped $20,000 that it would launch futures tied to Ethereum.

The product is coming to market February 8, subject to regulatory approval. It will be cash-settled and based on the firm's CME CF Ether-Dollar Reference Rate. According to CME's website, one contract will be equal to 50 ETH.

"Building on the success of Bitcoin futures and options, CME Group will add Ether futures to the cryptocurrency risk-management solutions available to trade in February," the firm said.

Building on bitcoin product

Since 2017, CME Group has built a sizable market for bitcoin futures. As per data from The Block, open interest in its bitcoin futures contract stood at over $1 billion at last check—making it one of the larger futures markets in crypto. As noted by my colleague Ryan Todd, CME's bitcoin futures market is a good proxy for institutional interest in bitcoin given firm's can link up to the market much in the same way as they can to CME's products in traditional derivatives. 

At the beginning of 2020, the firm launched its bitcoin options product.

The launch of futures represents an about-face for the firm, which has previously told The Block its focus was on bitcoin. In an interview at the end of 2019, Tim McCourt, CME Group's global head of equity index and alternative investment products, said that the exchange was "focusing on bitcoin futures since December 2017."

In a press release shared with The Block, McCourt said that the launch of ether futures was tied to the growth of its bitcoin futures and options market. 

“Based on increasing client demand and robust growth in our Bitcoin futures and options markets, we believe the addition of Ether futures will provide our clients with a valuable tool to trade and hedge this growing cryptocurrency,” said McCourt.

Trending Stories

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Digital asset economy fuels instant settlements innovation

Today the always-on demands of online markets have to be matched with the ability to access opportunities instantly and with no limits. Historically correspondent banks would move large sums of money for those needing to transfer funds while creating bottlenecks of unnecessary friction.
Read Full Story
Sponsored Post

Layer-2 Scaling Solutions: A Framework for Comparison - Commissioned by Polygon

Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.
Read Full Story
May 5, 2022, 3:17PM UTC
More