Eurex will launch Bitcoin index futures as CME Group cryptocurrency futures had their best trading day of the year on March 13.
The derivatives arm of Deutsche Boerse announced in a statement that it is the first European exchange to offer Bitcoin index futures, scheduled to start trading on April 17, 2023. Eurex described the launch as an important milestone in its quest to provide secure and trusted access to Bitcoin cryptocurrencies in a regulated market environment.
The new contract joins Eurex’s already listed BTCetc ETN futures with physical delivery and was developed in collaboration with FTSE Russell, the London Stock Exchange Group’s index business, and Digital Asset Research, a provider of institutional-grade digital asset data.
Arne Staal, FTSE Russell
Arne Staal, Chief Executive of FTSE Russell, said in a statement: “Our digital asset indices apply the same rigorous index policies and governance framework that apply to our equity and fixed income products. Perhaps most importantly, in this market we have partnered with DAR to develop a review methodology to establish a standard for inclusion of digital assets and stock market indices that provides the investment community with consistent pricing that reflects the real investable market.”
The launch comes as cryptocurrency prices have surged and U.S. exchange group CME Group had the best trading day for its suite of cryptocurrency futures this year.
As cryptocurrency prices soared, CME Group’s suite of cryptocurrency futures had its best trading day of the year on March 13. The trading volume exceeded 90,500 contracts, representing over $4.6 billion in face value. https://t.co/rBlNL3rgTP pic.twitter.com/F6EPd8GmUZ
— CME Group (@CMEGroup) March 15, 2023
Counterparty risk is a top concern for market participants, according to the latest Acuiti Crypto Derivatives Management Insight Report. This quarter’s report is based on a survey by the Acuiti Crypto Derivatives Expert Network, a group of 70+ executives from money managers, hedge funds, sell-side firms, and proprietary trading groups involved in crypto derivatives trading.
Almost half of the network, 47%, said they were very concerned about counterparty risk, compared to 31% for operational risk, 13% for liquidity risk and just 6% for market risk. The report also found that three-quarters of the network were either fairly or very optimistic about a recovery in digital asset markets over the next three months.
Will Mitting, founder of Acuiti, said in a statement, “This quarter’s report demonstrates the resilience of the crypto derivatives market as it recovers from an immensely challenging year.”
Trading volume at record level
Increased volatility following the recent collapses of Silicon Valley Bank and Signature Bank in the US has led to record trading volumes on stock exchanges.
On March 13, 2023, CME Group reported its highest daily volume on record with 66.2 million contracts traded.
Just in: CME Group hits record daily trading volume of more than 66 million contracts, driven by interest rate and stock index complexes. https://t.co/rOKFskoX93
— CME Group (@CMEGroup) March 14, 2023
Terry Duffy, Chairman and Chief Executive of CME Group, said in a statement: “The importance of risk management cannot be overstated. Our futures and options on futures products are doing what they were designed to do as investors seek to protect their portfolios amid heightened volatility.”
CME also achieved the following daily records in its interest rate and equity index complexes on March 13:
- Record interest rate futures and options volume of 41,904,908 contracts
- Record SOFR futures volume of 15,548,464 contracts
- Record SOFR option volume of 5,974,351 contracts
- Record volume of 30-day Fed Funds futures of 2,258,410 contracts
- Record volume of 17,805,973 contracts in stock index futures and options
- Record volume of 2,895,971 contracts for micro-e-mini S&P 500 futures
- Record volume of 1,053,544 contracts for E-Mini Russell 2000 futures
- Record micro E mini Dow Jones futures of 607,411 contracts
On March 13, 2023, Intercontinental Exchange also had Record level of trading activity with 14.45 million futures and options contracts traded during the day. This beat the previous record set on March 12, 2020 as the market reacted to the outbreak of the COVID-19 pandemic.
ICE said its financial futures and options portfolio hit a record, with a record 10 million contracts traded compared to an average daily volume in 2023 of three million contracts
Euribor, the benchmark contract for managing short-term euro-related interest rate risk, saw a record 5.49 million futures and options contracts traded, beating the previous record set on May 29, 2018. SONIA, the benchmark contract for UK interest rate risk, also saw a record 1.17 million futures and options contracts traded.
Chris Rhodes, President of ICE Futures Europe, said in a statement: “The record level of trading activity that took place in ICE’s markets on March 13th reflects a sudden change in risk sentiment in shares of US regional banks trading with the Rate expectations collided were priced in for central bank tightening. These volumes reflect a flight to liquidity and demonstrate the reliability of the futures markets as a risk management tool.”
ICE’s equity indices portfolio also hit a record 2.9 million futures and options contracts traded on March 13, 2023, compared to an ADV of 423,000 contracts.
The New York Stock Exchange, also owned by ICE, also reported that both NYSE full-day volume and the March 17, 2023 closing auction set records.
Record check ☑️
On Friday, NYSE all-day volume was a record, totaling 4.1 billion shares.
The NYSE closing auction also set a new all-time volume record at Friday’s rebalance, trading more than 2.7 billion shares. pic.twitter.com/D1RxvoJq2p
— NYSE 🏛 (@NYSE) March 20, 2023
Michael Reinking, senior market strategist at NYSE, said in a report that volumes are expected to be very high on March 17 due to quad witch expiry and quarterly index rebalancing.
“It was a record-breaking day with 4.1 billion shares traded on the NYSE,” Reinking added. “The closing auction was also the largest in history, with 2.72 billion shares traded, up 12% from the previous record set in December 2021.”
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