The CME Group has announced that it is testing the crypto waters to ascertain if there is sufficient interest in the market to warrant the creation of an ethereum futures product.
On an interview with Bloomberg, Tim McCourt, the CME head of equity products said:
“We’ll continue to gauge with them to ascertain the demand for futures,” adding, “There are no plans at the exchange to launch one currently.”
This follows closely in the wake of their launch of a price tracking index for Ether, Ethereum’s native currency, on Monday. The benchmark includes an Ether Real Time Index and an Ether Reference Rate which offer audited data for the pricing of the ETH/USD pair.
Data from exchange sites Bitstamp and Kraken is aggregated and then the UK crypto derivatives exchange, Crypto Facilities, makes calculations based on this data.
CME’s First Crypto Futures Product
In November last year, the group established a similar tracking index for bitcoin and subsequently launched a bitcoin futures product in December last year.
According to McCourt, even though the volume of bitcoin futures trading has not been high, he finds it encouraging that the figures rise every month and that there has been a tight spread between the spot market and the prices of futures.
He also dismissed the claim that bitcoin futures trading on CBOE and CME were partly to blame for the crypto market sell-off at the beginning of the year, saying,
“It’s tough to say that futures were responsible for that selloff given the relatively small percentage contribution to Bitcoin trading.”
In addition to the cash-settled futures that CME and CBOE offer at present, McCourt points out that there is significant demand for physically-settled ones. However, the current market infrastructure is still not robust enough to support such institutional trading.