German Derivatives Exchange to Launch Crypto Futures

The exchange is considering to introduce BTC, ETH, and XRP-backed futures initially.

Eurex is considering to launch a cryptocurrency futures exchange, according to a February 21 report by the Block.

The German derivative exchange is planning to introduce derivatives instrument tied to Bitcoin, Ether, and Ripple and has already started to meet with market-making firms to discuss the products, as per the report.

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The decision by the Deutsche Boerse-operated exchange is not abrupt as the German stock exchange operator was considering to introduce such crypto-backed investment instrument already in December 2017.

The wave of crypto derivatives in the US and Asian markets have forced the German exchange to study the feasibility of such contracts in the German market. As Finance Magnates reported in September 2018, Deutsche Boerse established a dedicated blockchain and crypto-asset division. The purpose of the unit is to explore the potential of the decade-old technology to disrupt the existing financial market infrastructure and examine the feasibility to introduce new products based on the new asset class.

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Speaking to a local business magazine earlier, a Deutsche Boerse spokesperson said: “We are thinking about futures, with which private investors and institutional investors can protect existing investments in bitcoin or set for falling prices of the cyber currency.”

The much-anticipated Bitcoin futures was first brought to the market by the Chicago-based exchange operator CBOE in December 2017. CME Group, aAnother US-based exchange, followed suit and introduced a similar product within a week.

Declining Trading Demand

However, the demand for crypto futures has taken a massive hit in recent months, mostly due to the plunging prices of cryptocurrencies. A recent market report showed that the demand for Bitcoin futures in the US market has been declining drastically since mid-2018. In last December, the exchanges recorded the least trading volume since the launch of the derivative instrument.

However, other markets are still bullish on Bitcoin futures. Major players like Bakkt, Nasdaq, and ErisX are planning to enter the market this year.

Just yesterday, CoinFLEX launched physically delivered cryptocurrency futures exchange in the lucrative Asian market.

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