The first Bitcoin Futures contracts for Europe are coming soon in the next month of September 2021. Europe’s largest derivatives exchange Eurex will be listing the Bitcoin ETN Futures starting September 13.
This will be the first time that European investors can trade Bitcoin futures contracts on a crypto exchange-traded product (ETP). The Bitcoin ETN Futures on Eurex will be based on ETC Group’s BTCetc Physical Bitcoin (BTCE). The BTCE product launched for the first time on Deutsche Börse XETRA last year in June 2020.
Later, the product made its way to multiple European exchanges. Currently, it remains the world’s most heavily traded crypto ETP having the narrowest spreads. The new Bitcoin ETN Futures will be traded in Euro and physically delivered in BTCE. Thus, it shall be 100% backed by Bitcoin and redeemed by investors anytime in BTC. Bradley Duke, CEO of ETC Group said:
“The announcement that Eurex will list a futures contract based on BTCE is a game changer, it firmly establishes BTCE as the benchmark Bitcoin ETP and go-to product for Bitcoin price discovery. We see the selection of BTCE by Europe’s largest derivatives exchange as recognition of the quality of the product and its world beating liquidity.
Also, because BTCE is fully-fungible with the underlying bitcoin, it means physical settlement of the futures contract is enabled through BTCE’s standard creation/redemption mechanism.”
Tracking the Bitcoin Price Development
The Bitcoin ETN Futures will allow institutional players to track Bitcoin price developments through a regulated environment. Furthermore, it will bring a completely transparent price discovery of the underlying BTCE.
Just like other derivative products traded on Eurex, the Bitcoin ETN Futures are all centrally cleared. Eurex will thus employ its standard clearing, netting, and risk management processes for the same. Randolf Roth, Member of the Eurex Executive Board said:
“Given the growing institutional demand for secure exposure to Bitcoin, we are delighted to begin listing these Bitcoin ETN futures on our regulated trading and clearing infrastructure at Eurex. This move will allow a greater number of market participants to trade and hedge Bitcoin, with this new future being treated in the same way as any other derivatives contract in terms of central clearing, netting, and risk management.”