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CME Accelerates Crypto Deployment

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CME Accelerates Crypto Deployment

SIP Acceleration

CME Group has introduced a new cryptocurrency product per month this year on Benchmark Rates, Indexed and Tradable Products, up from one per quarter in 2021.

On August 29, CME will launch Bitcoin Euro and Ether Euro futures, pending regulatory review. Tim McCourt, global head of equity and FX products at CME Group, told Markets Media that the Bitcoin Euro and Ether Euro futures contracts are the group’s eight and ninth crypto contracts.

Tim McCourt, CME

“In 2022, we introduced a new crypto product per month on benchmark rates, pegged and tradable products,” he added. “The rate has increased to one per quarter in 2021.”

McCourt continued as the new contracts are introduced Due to feedback CME has received from clients, the Euro and US Dollar are approaching parity and Euro-denominated cryptocurrencies are the second most traded fiat behind the US Dollar.

Additionally, EMEA accounted for 28% of total Bitcoin and Ether futures contracts traded so far this year at CME, up more than 5% from 2021.

Edmond Goh, Head of Trading at B2C2, said in a statement: “The launch of CME Group’s Euro-denominated Bitcoin and Ether futures will help meet the growing demand for regulated and robust, non-USD crypto derivatives.”

McCourt continued that the new contracts will open trading opportunities with derivatives, exchange-traded notes, exchange-traded funds and CME’s other liquidity pools, such as currencies.

Kaiko, the crypto data provider, said in a report that Bitcoin and Ether Euro denominated futures are already trading on the BitMEX exchange. “Daily contract volumes on BitMEX are at their lowest level this year,” the report added.

Source: Kaiko

BitMEX also announced the launch of the first-ever crypto perpetual currency swap contracts. Kaiko said, “These FX swaps allow investors to trade the product 24/7 even when the traditional FX market is closed and could be another widely used product in the derivatives market.”

On September 12, CME is also launching options on Ether futures, pending regulatory review.

Sam Newman, Head of Digital Asset Brokerage at TP ICAP, said in a statement: “With the upcoming Ethereum protocol merger, we expect this new contract to generate significant interest from our traditional clients as well as native crypto customers.”

volumes

In its results, CME reported that the second quarter was a record for all cryptocurrency products with an average daily open interest (OI) of 106,200 contracts, and was also the second highest quarter for average daily volume. of 57,400 contracts.

In the second quarter, Ether futures reached a record average daily volume of 6,600 contracts, up 27% from the first quarter. CME reported that Ether ADV futures rose to 7,900 contracts in July and open interest rose 7% from June.

McCourt added that volume and open interest have increased across all of CME’s crypto contracts.

“Institutional interest has not been hampered by falling valuations with an increase in large OI holders,” he said. “CME has been a safe haven as volatility has led investors to seek access to crypto through regulated venues and products.”

CryptoCompare’s Exchange Review For July, spot trading volumes across all centralized crypto exchanges fell 1.3% to $1.4 trillion, the lowest monthly trading volume since December 2020.

Source: CryptoCompare

However, derivatives trading volume increased for the first time since March, rising 13.4% to $3.1 trillion, which CryptoCompare said indicates increased speculative activity as traders believe there is room for further upside in this rally and traders have been speculating on the impact of Ethereum. Merge.

In July, CME’s Ether and Bitcoin futures volumes fell 9.9% to $36.5 billion in total according to CryptoCompare. The report states, “235,730 bitcoin futures were traded in July, down 7.11% since June. This is the first recorded drop in the number of Bitcoin futures contracts traded on the CME in four months.

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