CME Group, the largest derivatives exchange in the world, launches leading up to the Merge euro futures for both Ethereum and Bitcoin. Previously it was only possible to buy futures contracts denominated in dollars at CME, but now it is also possible with our own euros. By the way, the contracts start from 5 Bitcoin and 50 Ethereum, cheap entry is not included in that regard.
What is a future?
In the derivatives world, a future is a special type of contract in which an investor enters into an obligation to buy or sell an asset at a specific price on an agreed date in the future. For example, you can agree that you will take over a Bitcoin from someone for 25,000 euros in 6 months.
Tim McCourt, the global head of equity and forex products at CME Group is excited about the launch: “The launch of these new futures contracts builds on the strong growth and deep liquidity we are seeing in our dollar markets.”
The crypto derivatives market is huge, with $174 billion worth of contracts traded in the past 24 hours alone. CME Group’s announcement shows that crypto is still in high demand, especially as Ethereum’s biggest upgrade since the blockchain was launched.
Ethereum options also on the way
While futures give both the buyer and seller of the contract an obligation, options are a way to operate with slightly less risk. An option contract gives the holder of the contract the right – but not the obligation – to buy or sell the underlying asset at the agreed price at the predetermined time. At the beginning of September, CME Group should be able to trade in Ethereum options.
With this, CME Group shows that it has a lot of confidence in the Merge and that it hopes to make a profit in this way. “We are getting closer to the highly anticipated Merge of Ethereum and see more and more people coming to our platform to manage their Ethereum price risk. Derivatives are a way for professionals to remove or add risk from their position.