CME Group has begun trading cryptocurrency index futures jointly developed with Nasdaq.
Coinpost, a blockchain media outlet, reported on June 10 that the product is CME’s first market-capitalisation-weighted cryptocurrency futures contract.
The product is called Nasdaq CME Crypto Index Futures. The settlement index is the Nasdaq CME Crypto Settlement Price Index, made up of a basket of cryptocurrencies with top market capitalisation and liquidity. As of the announcement, its constituents are eight tokens: bitcoin (BTC), bitcoin cash (BCH), ether (ETH), Solana (SOL), XRP, Cardano (ADA), Chainlink (LINK) and Stellar Lumens (XLM).
The contract comes in two types. The full-size product has the ticker NCI and is structured as 10 dollars times the index value. The micro product has the ticker MCI and is 1 dollar times the index value. Both are cash-settled and were designed with broad participation in mind, from retail investors to institutional investors.
The launch is largely aimed at meeting institutional investors’ demand for crypto exposure. Giovanni Vicioso (조반니 비시오소), global head of cryptocurrency products at CME, said investors want diversified exposure to the cryptocurrency ecosystem in a volatile market environment while maintaining the capital efficiency and transparency of regulated futures markets.
Nasdaq also highlighted growing demand for benchmarks. Sean Wasserman (션 와서먼), head of Nasdaq’s index product management division, said that as digital asset investor participation expands, demand is also rising for benchmark indexes with governance and transparency on par with other asset classes.
Market participants see the listing as an example of expanding points of contact between traditional financial market infrastructure and crypto markets. Mick McLaughlin (믹 맥러플린), CEO of Hashdex U.S., called the listing evidence of maturity as crypto intersects with traditional financial market infrastructure. The futures will be listed and managed under CME rules.
CME’s existing cryptocurrency derivatives trading is also showing a trend of expansion. CME said average daily volume in cryptocurrency futures is up 43 percent so far this year. On May 29, it began trading cryptocurrency futures and options, including bitcoin, 24 hours a day, seven days a week. In the first weekend alone, more than 7,200 contracts traded, with notional principal of about $50 million.
CME’s new product appears to target demand for a regulated-market tool for diversified exposure by reflecting multiple major cryptocurrencies at once rather than a single token. Attention is focused on what effect it could have on how institutional money accesses crypto markets.
Our new @Nasdaq CME Crypto Index futures offer a regulated way to gain broad exposure to leading cryptocurrencies.
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