European derivatives exchange Eurex is to launch bitcoin ETN futures, a new contract that offers clients access to the price of bitcoin in a regulated on-exchange and centrally cleared environment.
This offering will be the first regulated market in bitcoin-related derivatives in Europe.
Launch of the new contract is planned for 13 September. The futures contract is based on the BTCetc Bitcoin Exchange Traded Crypto (ISIN: DE000A27Z304), which is listed on the Frankfurt Stock Exchange and has been among the most heavily traded ETF/ETN contracts on Xetra since its start in June 2020. The bitcoin ETN was equivalent to 1/1000th of a Bitcoin at launch and is fully backed by and redeemable in bitcoin. The new futures contract will be traded in euro and physically delivered in bitcoin ETNs.
This set-up allows investors to track the price development of Bitcoins in a fully regulated on-exchange environment and based on a transparent price discovery of the underlying ETN. Both the underlying ETN, as well as the futures, trade, clear and settle on Deutsche Börse Group’s proven infrastructure. Bitcoin ETN futures are centrally cleared like any other derivatives traded on Eurex. Eurex’s standard clearing, netting, and risk management processes thereby come into effect, mitigating counterparty risk and reducing operational costs for market participants.
Randolf Roth, Member of the Eurex Executive Board, says: “There is significant demand from institutional investors to gain Bitcoin exposure in a secure and regulated environment. 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.”
