11 Nov 2024
Eurex
Joined forces: Flow Traders partner of Eurex on crypto offering
In April 2023, Eurex launched futures on the FTSE Bitcoin Index. Over 100,000 traded contracts later - representing around $4 billion in notional – we enhanced our crypto offering by adding FTSE Ethereum Index Futures and Options this August. This marked another milestone in our ambition to offer secure access to cryptocurrencies in a regulated market environment and a good opportunity to talk to our market maker partner, Edgar de Bruin, Head of Digital Assets Trading at Flow Traders, and to Nicolae Raulet, Crypto Derivatives Product Manager at Eurex.
Nicolae, how is the new crypto product doing?
Well, as we only launched it two months ago, it is a bit early to speak of successes - but we have a promising trend: our Ethereum Futures traded 5,800 lots in these first two months after their launch. Options contracts have also been in the spotlight recently, with the first block trades executed by institutional customers. In addition, we can say that both Bitcoin and Ethereum order books present a robust price picture that is only a few ticks wide, supported by the active participation of our liquidity providers across global trading hours. They ensure clients can execute orders at highly competitive prices.
All in all, the first looks are good.
Edgar, what is your view on the crypto market in general?
Digital assets are an evolving asset class that is gaining institutional acceptance. The market capitalization of digital assets increased by 46% from 2023 to 2024, highlighting the growing demand. This is, in part, driven by increasing institutional interest. We believe the development of institutional-grade infrastructure and clearer regulatory frameworks, such as Europe’s Markets in Crypto-Assets Regulation (MiCA), will contribute to increased market stability and overall accessibility. As a leading liquidity provider, we continuously strive to support the development of the broader market. Eurex’s crypto offering is one example of how regulated products make digital assets more accessible to a wider range of investors.
Nicolae, why FTSE Ethereum Index Futures and Options, and what do they add to the offering?
There is growing institutional interest in Ethereum, a cryptocurrency representing about 15% of the total crypto market cap. Its unique value comes from smart contracts and its widespread use in decentralized finance (DeFi), making it a key asset for portfolio allocation. The partnership with FTSE Russell to deliver Bitcoin and Ethereum spot index-based products significantly strengthens the robustness of our offerings. Leveraging FTSE Russell's collaboration with Digital Asset Research, they apply a stringent quarterly vetting process to exchanges used as sources for spot prices. FTSE's long-standing reputation for producing transparent and reliable market indices guarantees that the benchmarks used in these products meet the highest institutional standards.
Edgar, what prompted you to become a market maker in Eurex’s crypto offering?
In addition to the importance of increasing efficiency and price discovery in the crypto markets, we believe that being a market maker for the Eurex Ether Futures offering aligns closely with our vision of bridging crypto and traditional finance with these ecosystems co-existing to benefit end investors. It is also a natural continuation of our long-term partnership with Eurex to provide liquidity for new and innovative products.
How do the Eurex products fit into your overall product strategy?
Providing on-screen liquidity in Eurex's products fits seamlessly into our overall trading strategy and positioning, given our existing integrations with Eurex's trading infrastructure and our active role in the global crypto trading ecosystem.
Nicolae, what can we expect from Eurex regarding crypto in the foreseeable future?
Eurex now offers futures and options on the two largest cryptocurrencies, Bitcoin and Ethereum. A key priority is to build liquidity and open interest in these products. Nevertheless, we work closely with market participants to identify new product initiatives. Other cryptocurrencies like Solana are getting a lot of attention. Products referencing a basket of cryptocurrencies could also gain some traction in the future. Large European institutions have been much more conservative in their approach to the crypto market. However, there is some tailwind with the approval of US spot crypto ETFs and the introduction of European crypto regulation in the form of MiCA.
