CFTC greenlights Eurex Bitcoin index futures

abdelaziz Fathi

Deutsche Börse’s derivatives-focused exchange, Eurex, has become the first European exchange to get US regulators’ approval to offer Bitcoin index futures.

The US Commodities Futures Trading Commission (CFTC) has granted approval for Eurex FTSE Bitcoin Index Futures. Starting from May 29, 2023, trading of these futures is now available for investors based in the United States.

Eurex said this regulatory green light opens up new opportunities for US investors to engage in Bitcoin trading through its regulated platform. This move brings new avenues for trading and hedging for market participants, granting them access to a broader range of counterparts and liquidity pools that operate across Asian, European, and US trading hours.

Michael Lie, Head of Digital Asset Trading at Flow Traders, comments: “The approval of the first exchange-traded Bitcoin future in Europe by the CFTC, making it accessible to the US market, represents another significant step towards increasing the accessibility of cryptocurrencies among institutional investors. We welcome Eurex, one of the major derivatives exchanges, to expand its digital asset offering, which strengthens the belief of the acceptance and adoption of digital assets. Flow Traders remains committed to the development of the digital asset space and belief if will continue to play an important role in the global financial industry.”

Eurex has also taken the lead in offering bitcoin index futures in Europe. The new contract was developed in partnership with global index provider FTSE Russell and institutional-grade digital asset data provider Digital Asset Research (DAR). The FTSE Bitcoin Index Futures already made its debut at the German-based derivatives exchange on 17 April 2023.

Eurex described the move as a “major milestone” in its ambition to offer safe and trusted access to cryptocurrencies in a regulated market environment. The new index-based contract is traded in EUR and USD as it complements Eurex’s already listed BTCetc ETN Futures with physical delivery.

Eurex futures contract is priced off at the FTSE DAR Reference Price as the underlying reference index that reflects the settlement price of Bitcoin, and is settled in cash. The index references pricing data using transactions and order book activity from several cryptocurrency exchanges and over-the-counter liquidity providers.

Eurex said the move marks a new development in the nascent crypto futures market that will give new access to institutional investors, either those looking to branch into different markets or struggling to participate due to limited capitalization.

Surging prices led to a jump in open interest and trading volume for Bitcoin futures as investors sought to hedge their positions in the spot market by opening futures positions at exchanges like CME.

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