CME Notches Record Crypto Derivative Trades in Q2

CME Group’s crypto derivatives posted record open interest and higher than average daily volumes during the second quarter — even as the sell-off in digital assets markets intensified.  

Average daily open interest across its crypto products was 106,000 contracts, an all-time quarterly high, according to a report published by the derivatives exchange Wednesday. Average daily volume was about 57,000 contracts — the second-highest quarterly total.

Ether futures, in particular, notched an average daily volume in the second quarter of 6,600 contracts, an all-time high that was up 27% from the first quarter. A record 26,500 contracts traded June 15.

During the third week of June, the combined number of what the company calls large open interest holders for CME Group‘s crypto futures reached a high of 404, signaling growing interest from institutional investors. 

A CME Group spokesperson did not immediately return a request for comment.

Futures contracts are legal agreements to buy or sell a particular asset at a predetermined price at a specified time in the future. CME futures are dollar cash-settled and are based on a once-a-day reference rate of the underlying asset’s price.

CME began offering bitcoin futures contracts in 2017 and later added ether futures in February 2021. It launched cash-settled micro bitcoin futures contracts — worth one-tenth of one bitcoin — last year and moved in November to add micro ether futures, as liquidity in ether futures grew. 

Tim McCourt, CME Group

More recently in March, CME rolled out options on micro bitcoin and ether futures. Tim McCourt, CME’s global head of equity and foreign exchange products, at the time said the new offering would allow traders of all sizes to manage crypto market exposure with more precision.

The first bitcoin futures-based ETFs hit the market last October after SEC Chair Gary Gensler had hinted in August that the agency would be more comfortable with products limited to CME-traded futures contracts. The SEC has not yet approved an ETF that invests in crypto directly.

Simeon Hyman, head of ProShares’ investment strategy group, told Blockworks earlier this month that daily volume in the firm’s Bitcoin Strategy ETF (BITO) has eclipsed that of the Grayscale Bitcoin Trust (GBTC). He noted ​​a futures-based ETF is “not at all a second-class citizen” when considering challenges in the spot market.

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