CME Group Says It’s Gauging Client Interest

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CME Group Says It’s Gauging Client Interest

CME Group Says It's Gauging Client Interest
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Chicago-based derivatives trade CME Group mentioned that it plans to gauge consumer curiosity for an ethereum futures product now that it has launched a worth index and benchmark for ether, the world’s second-largest cryptocurrency.

Speaking with Bloomberg on the sidelines of an trade convention in New York, Tim McCourt, CME’s head of fairness merchandise, mentioned that the trade operator will take a look at the waters to see if there may be sufficient demand to justify the creation of an ethereum futures product, although the agency doesn’t but at present have plans to checklist contracts that observe the value of ether.

“We’ll continue to gauge with them to ascertain the demand for futures,” he mentioned. “There are no plans at the exchange to launch one currently.”

As CLC reported, CME on Monday unveiled its new benchmark Ether Reference Rate and Ether Real Time Index, every of which gives audited pricing knowledge for ETH/USD buying and selling pairs. Data is aggregated from cryptocurrency exchanges Kraken and Bitstamp after which calculated by UK cryptocurrency derivatives trade Crypto Facilities.

ethereum futures
CME Group lately launched an ether worth benchmark, broadly seen as step one in finally making a futures product.

McCourt additional mentioned that CME has recognized a “clear demand” for physically-settled cryptocurrency futures. At current, each CME and fellow Chicago trade CBOE supply futures contracts which might be tied to the value of bitcoin however are settled in money — not cryptocurrency — on account of varied custodial and regulatory issues. “There’s a clear demand for it in the market; people would welcome that innovation,” he mentioned, including:

“With bodily supply you need to determine what to do with the Bitcoin; are you going the custody route, are you going the personal key route, these are very attention-grabbing questions and we’re wanting ahead to a few of these options availing themselves out there, however proper now the group is finest served by a monetary contract.”

Elsewhere within the interview, McCourt hit again at claims that CME’s bitcoin futures product launch triggered the current bear market. Noting that bitcoin peaked at an all-time excessive on Dec. 17 — the identical day that CME listed bitcoin futures — researchers on the US Federal Reserve argued that the bear market was the results of merchants taking over brief positions in futures.

McCourt, although, mentioned that though futures quantity has grown significantly for the reason that markets opened, it was far too small in December to be chargeable for a full-fledged selloff.

“If you have a look at the notional that trades, it’s powerful to say that futures have been chargeable for that selloff given the comparatively small share contribution to Bitcoin buying and selling,” he mentioned.

Images from Shutterstock.

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