CME Group Launches Micro Bitcoin And Ether's Euro-Denominated Futures

JAKARTA - The CME Group, the world's largest derivative exchange, continues to enrich its crypto asset products by launching a euro-denominated futures micro contract for bitcoin and ether. This product is intended to meet the growing and diverse market demand.

Futures micro is a derivative contract that is smaller than the standard contract. Thus, futures micro can offer higher flexibility and accessibility for investors, especially those with limited capital or want to manage risk better.

The CME Group has launched a US dollar-denominated futures micro (USD) for bitcoin (BTC) and ethereum (ETH) in 2021. Now, the CME Group adds a euro-denominated version to both crypto assets, each of which symbolizes a tenth or 0.1 BTC or 0.1 ETH.

Giovanni Vicioso, head of global crypto asset products at the CME Group, said the launch of this new product was a response to growing interest in bitcoin and ether, both from retail and institutional investors.

"We have seen a four-fold increase in volume for USD's futures micro-denominated contract since its launch last year. The launch of this new euro-denominated contract will provide additional product clients to be more efficient in protecting bitcoin and ether exposure in the second most fiats after USD's nomination contract," Vicioso said in a press release.

According to data from the CME Group, in the fourth quarter of 2023, the average daily volume (ADV) for futures micro bitcoin reached 19,000 contracts, while for futures micro ether it reached 1,500 contracts. The value of this contract is equivalent to 1,900 BTC (around Rp 29.7 billion) and 150 ETH (around Rp 3.5 billion).

This announcement also comes amid a significant surge in open interest (OI) in futures bitcoin in general. Recently, the CME Group has surpassed Binance in OI for BTC-based futures. On February 20, 2024, CME Group reported OI in BTC futures of USD 6.7 billion (approximately IDR 104.9 trillion), outperforming OI Binance, which is currently around USD 5.91 billion (approximately IDR 92.5 trillion).

Regarding the new futures crypto-nominated euro, Vicioso noted that so far this year, 24% of the futures bitcoin and ether volumes in the CME Group have been executed from the EMEA region (Europe, Middle East, and Africa). This shows strong demand from the region.

Sam Newman, head of digital assets at TP ICAP, one of the largest brokerage companies in the world, expressed company support for CME's latest efforts. "TP ICAP will support the latest crypto derivatives that determine the market from the CME Group by providing block facilitation services for this product," said Newman.

Futures micro bitcoin and ether-denominated euros will be available for trading at the CME Group starting February 28, 2024, with the first delivery date on March 31, 2024. These contracts will be finalized in cash in euros, based on benchmark prices from the CME CF Bitcoin Reference Rate and the CME CF Ether-DoLLar Reference Rate.