CME Group to release Euro-denominated Bitcoin and Ether futures

Leading derivatives marketplace CME Group is set to offer its first euro-denominated Bitcoin and Ether futures on August 29 after its crypto derivatives posted record open interest volumes in Q2 2022. CME Group executive revealed that Europe, the Middle East and Africa region accounts for 28% of total BTC and ETH futures contracts traded.

As per the announcement, the upcoming cash-settled products will match their US dollar-denominated counterparts. Bitcoin euro futures are set to be comprised of 5 BTC per contract, while the Ether euro futures are planned to start with 50 ETH.

According to CME’s global head of equity and foreign exchange products, Tim McCourt, demand for risk management solutions by institutional investors outside the US is increasing as uncertainty remains in the crypto market.

McCourt added that euro-denominated cryptocurrencies are the second-highest traded fiat behind the US dollar. In his words, the number of bitcoin and ether contracts traded in Europe, the Middle East, and Africa represent about 28% of worldwide totals, which is up over 5% from 2021.

This decision comes after CME’s crypto derivatives posted record open interest – 106,000 daily contracts on average – and higher than average daily volumes of 57,000 contracts in Q2 2022.

As CME Group’s spokesperson told Blockworks, daily open interest on the exchange’s crypto products averaged nearly 127,000 contracts in July, up 59% from June. The average daily volume on those products was roughly 62,000 contracts – around 11% higher than in the previous month.

CME started offering Bitcoin futures back in 2017 and added an Ether version last February. It also launched micro options on Bitcoin and Ether futures this March.

“The launch of these micro-sized options builds on the significant growth and liquidity we have seen in our Micro Bitcoin and Micro Ether futures. These contracts will offer a wide range of market participants – from institutions to sophisticated, active, individual traders – greater flexibility and precision to manage their exposure to the top two cryptocurrencies by market capitalization,” McCourt commented back then.

CME Group said that micro Ether futures, in particular, are gaining steam, as more than 3.2 million such contracts have traded in the last 8 months.

In July, the average daily open interest of micro Ether futures reached 47,000 contracts, while average daily volumes hit nearly 26,000 contracts – up 43% and 41% from June, respectively.

As per CME’s spokesperson, the spike was partially due to Ether’s increasing price, as its micro Ether contracts settled at $1,014 on June 30, while ETH is traded at roughly $1,600 for now.

The CME representative also called the upcoming Merge, the Ethereum blockchain’s switch from a Proof-of-Work consensus to a Proof-of-Stake alternative, “one of the most anticipated events in the crypto space to date.” He said that 78% of micro Ether options open interest mature in September or December, suggesting traders are hedging risk ahead of the Merge.