The Chicago Mercantile Exchange Group (CME), the world’s leading derivatives marketplace, announced today its plans to launch Euro-denominated Micro Bitcoin (BTC) and Micro Ether (ETH) futures contracts on March 18. The offerings are currently under regulatory review, CME noted in its announcement on X.
The CME is prepared to launch new investment products based on Bitcoin and Ethereum, giving clients more flexibility to participate in the crypto market.
Micro Bitcoin and Micro Ethereum futures contracts are small-sized futures contracts based on the underlying assets Bitcoin (BTC) and Ethereum (ETH), respectively.
Representing 10% of the respective coin’s value, these futures contracts allow investors with less capital to join the Bitcoin and Ethereum markets. They also potentially reduce risk and make these assets more attractive for portfolio diversification.
Wall St. Is Hot For Cryptos
Giovanni Vicioso, global head of crypto products at CME Group, said that the Euro-denominate contracts would offer CME’s clients additional investment options to hedge their Bitcoin and Ether exposure, in addition to its US dollar ones. He also noted that the Euro is the second-largest traded fiat currency after the US dollar.
The CME’s expansion of its Euro trading options comes following the success of the US dollar-denominated Micro Bitcoin and Ethereum futures contracts, which saw a fourfold increase in volume. The coming products will be listed and subject to CME rules.
“Global investors have sought more precise tools to manage their risk as interest for bitcoin and ether grows. As such, we have seen a four-fold increase in volume in our USD-denominated Micro Bitcoin and Micro Ether futures,” said Vicioso.
The new offerings will be part of a list of CME investment products based on Bitcoin and Ethereum, including the US dollar-denominated Micro Bitcoin and Ethereum futures contracts, the Euro-denominated Bitcoin and Ethereum futures contracts, and Bitcoin and Ethereum options products.
The CME is a vital part of finance. The company is a gateway for major institutions in the US to enter and gain exposure to the crypto market. The CME debuted its first BTC futures contract by the end of 2017, followed by the ETH futures contract in 2021.
The financial giant is also the top preferred derivatives exchange of large traditional financial institutions. Data reveals that it surpassed the leading crypto exchange Binance in terms of futures trading volume in November 2023.
Institutional Demand On The Rise
After a series of collapses in 2022, many crypto observers believed that institutional interest in crypto would crash dramatically. However, 2023 proved the opposite. BlackRock’s application for a spot Bitcoin exchange-traded fund in July officially brought institutional trust back to the game. Since BlackRock’s move, Bitcoin has left the $25,000 behind.
Institutional adoption is becoming more intense after the US Securities and Exchange Commission (SEC) eventually approved several spot Bitcoin exchange-traded funds (ETFs) for trading earlier this year.
Following the debut of spot Bitcoin ETFs, there has been a strong, consistent inflow into these funds, and more Bitcoin has been reportedly accumulated by Wall Street. The strong performance of these ETFs has undoubtedly shown strong institutional interest in crypto investment.
The CME’s coming Euro-denominated micro Bitcoin and Ethereum futures could signify continued interest and confidence in the long-term potential of crypto.
Many hopeful investors now expect the same fate for spot Ethereum ETFs and, obviously, other crypto ETFs. Up to date, eight asset managers, including BlackRock, Franklin Templeton, and ARK Invest, have filed for the spot Ethereum ETFs. All eyes are on May 25, when the SEC will make a decision on these spot Ethereum ETF filings.
Outside of the Bitcoin funds, the SEC’s stance toward these funds remains unclear. In a statement following the spot Bitcoin ETF approval, SEC chair Gary Gensler stressed that the recent approval “should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.”