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Eurex announced plans to expand its cryptocurrency derivatives portfolio with the introduction of FTSE Ethereum Index Futures and Options on August 12, 2024. This move follows the company's launch of FTSE Bitcoin Index Futures and Options in 2023, marking another step in Eurex's goal to provide regulated market access to cryptocurrencies.
Ethereum, with a market capitalization of approximately $400 billion, is currently the second-largest cryptocurrency. Institutional and professional customers have shown significant interest in trading and hedging opportunities, as evidenced by high trading volumes in derivatives and other investment products.
The new contracts will be listed in both EUR and USD, using the FTSE Ethereum Index as the underlying asset. Each contract will represent 10 Ether, valued at approximately $35,000. The cash-settled contracts will expire on the last Friday of each month, with monthly and quarterly maturities available. Additionally, weekly expiring contracts will be offered for options.
FTSE Russell, in collaboration with Digital Asset Research (DAR), developed the FTSE Ethereum Index. The index utilizes data from verified assets and exchanges to comply with EU Benchmarks. The final settlement rate for the new Eurex contracts will be calculated using a volume time-weighted average of the FTSE DAR Digital Asset Price over a 15-minute period before the fixing time. Liquidity will be supported by both orderbook and over-the-counter providers.
Eurex's previous launch of FTSE Bitcoin Index Futures in April 2023 has seen over 100,000 contracts traded, equivalent to more than $3.5 billion notional value. The company expanded its crypto product offering in October 2023 with options on Bitcoin Index Futures, allowing investors to hedge Bitcoin exposure and implement various trading strategies.
Randolf Roth, Member of the Eurex Executive Board, stated: "We look forward to expanding our offering in crypto derivatives together with FTSE Russell and Digital Asset Research for our clients. As one of the world's leading CCPs, Eurex offers trading on a regulated exchange and is therefore the right partner to enter the crypto space for institutional clients."
Kristen Mierzwa, Head of Digital Assets at FTSE Russell, an LSEG business, commented: "We are delighted to support the expansions of Eurex's digital assets ecosystem with the offering of futures and options on the FTSE Ethereum Index. In association with the experts at Digital Asset Research, we have established an industry standard for assessing underlying digital asset and exchange inclusion. We have applied this vetting methodology to offer indices reflective of the real investable market."
