FTSE Russell, an index provider owned by the London Stock Exchange, has launched the FTSE Bitcoin Index futures on the Eurex exchange, becoming the first exchange in Europe to offer Bitcoin index futures. The service launched on April 17 and offers cash settlement in USD and EUR. FTSE Russell first started looking at the blockchain space in 2017 and formed a partnership with Digital Asset Research (DAR) in 2019, which serves as the firm’s pricing provider. Since FTSE Russell specializes in indexes, the digital asset space is particularly appealing due to the 24/7 nature of cryptocurrency markets.
this Kitco News article, FTSE Russell, an index provider owned by the London Stock Exchange, has made significant strides in the cryptocurrency market by launching the FTSE Bitcoin Index futures on the Eurex exchange, becoming the first exchange in Europe to offer Bitcoin index futures. The service launched on April 17 and offers cash settlement in USD and EUR.
Kristen Mierzwa, Head of Digital Assets at FTSE Russell, stated that the FTSE Bitcoin Index futures are “an ecosystem play for us” and that “derivatives are really important and foundational, and once you’ve got that product established, it’s easier for other people to build other products that would maybe use that futures contract to hedge positions.”
FTSE Russell first started exploring the blockchain space in 2017 and formed a partnership with Digital Asset Research (DAR) in 2019, which serves as the firm’s pricing provider. Together, the two companies created a joint methodology to vet the exchanges as pricing s and to vet the assets.
“Every quarter, we look at the universe of exchanges to find exchanges that pass our criteria. We’ll then use them as a pricing , and we aggregate their prices in real-time, utilizing volume, weight, and trading price to determine our reference price,” Mierzwa explained.
As FTSE Russell specializes in indexes, the digital asset space is particularly appealing due to the 24/7 nature of cryptocurrency markets. “We were looking at private equity, and it turns out indexing digital assets was an easier business venture to get into because of the 24-hour nature of the prices. In private equity, it’s really hard to get a good price,” Mierzwa said.
FTSE Russell is not the only traditional financial institution that has entered the cryptocurrency market. As blockchain technology gains wider adoption around the world, institutional investors and other financial institutions are also looking for ways to capitalize on the rising popularity of digital assets.
As per the same Kitco News article, “the total market capitalization of cryptocurrencies briefly surpassed $2.5 trillion in May, up from $750 billion at the start of the year.” This rapid growth has not gone unnoticed by institutional investors and other financial institutions, who are now exploring ways to offer new products designed to enter the cryptocurrency market.
In light of this information, the FTSE Bitcoin Index futures launched on the Eurex exchange by FTSE Russell is a significant development in the cryptocurrency market. As more traditional financial institutions continue to enter the market, it is likely that we will see more innovative products designed to capitalize on the rising popularity of digital assets.
