Cryptos will soon be more available on the futures market.
One of the world’s largest derivatives exchange owners will introduce Bitcoin and Ether Euro futures on August 29, the company, CME Group, announced in a press release.
Futures contracts, which are tradeable agreements, help traders to hedge their cash positions using digital currency.
“Ongoing uncertainty in cryptocurrency markets, along with the robust growth and deep liquidity of our existing Bitcoin and Ether futures, is creating increased demand for risk management solutions by institutional investors outside the US,” says CME’s head of equity and FX products Tim McCourt.
Derivatives trading in cryptos already takes place. Binance, the world’s largest crypto exchange where derivatives trading takes place, had more than $50 million in volume in one day this week, according to CoinMarketCap data.
Even though this type of trading is meant to act as a hedge, it can add to the volatility. When there are wild swings in Bitcoin, these leveraged-up positions can be wiped out.
Bitcoin has been on a mild rally recently, up more than 20% the last month, but down 67% since its high in November.
