Eurex, Europe’s largest derivatives exchange, announced it began trading bitcoin futures contracts for the first time this week. Eurex’s bitcoin futures contracts operate together with the BTCetc – ETC Group Physical Bitcoin (BTCE), one of Europe’s largest bitcoin exchange-traded products, with $782 million in assets under management.
Instead of delivering actual bitcoin, the Eurex’s bitcoin futures contracts will be delivered in shares of BTCE if an investor holds the contracts until expiration. As an ETN that is 100% backed by bitcoin and able to be redeemed for underlying bitcoin, BTCE acts as a reliable bitcoin proxy for the futures contracts.
“There is significant demand from institutional investors to gain Bitcoin exposure in a secure and regulated environment,” said Randolf Roth, member of the Eurex executive board. “We are pleased to be the first regulated exchange to offer this innovative contract. The new Bitcoin ETN futures enable investors to trade and hedge Bitcoin within Eurex’s proven trading and clearing infrastructure without the need to turn to unregulated crypto venues or set up a separate infrastructure, such as a crypto wallet. It is the logical extension of the ETN that already trades very successfully on Xetra.”
BTCE’s connection with Eurex’s bitcoin futures may give it a boost by attracting assets from users of these derivative contracts.
BTCE is listed on multiple European exchanges, including its original home, the Deutsche Boerse XETRA. In Europe, it competes with the Bitcoin Tracker One and the Bitcoin Tracker Euro, two Stockholm-listed bitcoin ETNs, with AUM of $863 million and $1.2 billion, respectively.