CME Group Is Looking To Offer Cardano, Solana Futures

CME Group is looking to offer Cardano and Solana futures according to an executive who announced it during a conference in London so let’s read more in today’s latest cryptocurrency news.

Solana and Cardano could have futures contracts available on the Chicago Mercantile Exchange according to a CME Group executive. The director of equity and crypto products at CME, Payal Shah, CME group is looking to offer Cardano and Solana futures:

We’re looking at it. We get a number of client requests for anything outside the top two—Solana, Cardano.”

Although still being called altcoins, because they are not bitcoin or ethereum, SOL and ADA solidified their presence in the top 10 by market cap. SOL was the sixth biggest coin with a $44.3 billion market cap and ADA was the eighth biggest with a $39.5 billion market cap. Solana saw a lot of growth and was the top-performing coin in 2021 that increasing from $1.84 at the start of the year to $178 by the end of 2021.

Shah said that CME will have to contend with two main challenges before offering futures contracts for ADA and SOL. The exchange’s futures contracts settle to the index because they rely on five different exchanges for price so if there’s an outage on one, they have the precise price and can settle their futures. The other concern is about regulations:

“We need to know where to send the paperwork,” she said.

There has been a growing demand for BTC and ETH products on CME. The commodities exchange started offering options on Micro BTC and Micro ETH futures a week ago which means that traders can buy derivatives contracts in increments worth 1/10^th of BTC’s or Ethereum’s price. The crypto derivatives products like BTC futures allow investors to speculate on the asset’s price without having to physically hold the underlying asset. Investors can use them to bet on the price movement and protect against the asset’s volatility.

The spot market deals with the real-time price and delivery of the asset. There’s no buying a contract or selling BTC if this hits a certain price in the future because the transaction takes place right away:

“We’re off to a really good start. The screens are lit. We’ve had some really good trades. And just to unpack that a little bit, the micro Bitcoin futures contract we launched in May of last year, and already we’ve done close to 5 million contracts.”

She continued:

“In the few years—just over four years—since we launched our initial futures contract, the standard Bitcoin future with five-time multiplier, we’ve seen that grow from doing 1,000 contracts a day to now 10,000 a day. That growth is mind-boggling.”