The year of crypto: CME Group made cryptocurrency trading more accessible in 2021

By Edlyn Cardoza

2021 was a winning year for cryptocurrency, from several institutions taking the leap and getting involved with crypto to the sector raising millions in investment and the thriving rise of NFTs.

The first and most famous coin among cryptocurrencies, Bitcoin, had emerged in 2009. Since then, thousands have been created in its wake, and the number only seems to be growing every day, adding more and more value to the crypto market. According to CoinMarketCap, out of the well-known cryptocurrencies, only the top four by market capitalisation (Bitcoin, Ether, Cardano, and Binance) are worth a total of $1.5 trillion.

Even though Bitcoin’s primary cause was to serve as an alternative mode of payment in decentralised digital environments, it is gradually working its way into broader, more institutional arenas, even becoming legal tender in El Salvador.

This year, interest in crypto assets from retail investors, particularly Millennials and Gen Zs, has reached new heights. And this is one of the reasons that led CME Group, the US leading and most diverse derivatives marketplace, to launch Micro Ether Futures in early December, further expanding its suite of cryptocurrency derivatives offerings and marking its second micro cryptocurrency product this year.

“The launch of Micro Ether futures underscores the significant growth and liquidity we have seen in our cryptocurrency futures and options,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. “Sized at one-tenth of one Ether, Micro Ether futures will provide an efficient, cost-effective way for a range of market participants — from institutions to sophisticated, active, individual traders — to hedge their spot Ether price risk or more nimbly execute Ether trading strategies, all while retaining the features and benefits of CME Group’s larger-sized Ether futures.”

Micro Ether futures will join CME Group’s growing suite of cryptocurrency derivatives, including recently launched Micro Bitcoin futures that have traded more than 2.7 million contracts since launching in May.

“As institutional demand for transparent, exchange-listed crypto derivatives continues to increase, we are pleased to launch our new Ether futures contract,” McCourt commented. “The addition of Ether, along with our liquid Bitcoin futures and options, will create new opportunities for a broad array of clients, whether they are looking to hedge ether positions in the spot market or gain exposure to this cryptocurrency on a regulated derivatives marketplace.”

As one of the world’s leading and most diverse derivatives marketplace, CME Group exchanges offer the most comprehensive range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather, and real estate.

The group has trading facilities in New York and Chicago and operates CME Clearing, one of the world’s leading central counterparty clearing providers in the world. Its products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.

In February of 2021, CME Group had already launched Ether futures, further expanding its crypto derivatives offerings in this emerging asset class. Launch-to-date, more than 675,500 Ether futures contracts (equivalent to about 33.8 million ether).

“Since the launch of Ether futures in February, we have seen steady growth in liquidity in these contracts, especially among institutional traders,” added McCourt. “At the same time, the price of ether has more than doubled since these contracts were introduced, creating demand for a micro-sized contract to make this market even more accessible to a broader range of participants. Micro Ether futures will offer even more choice and precision in how they trade Ether futures in a transparent, regulated and efficient manner at CME Group.”

In September 2021, CME Group also announced the launch of the derivatives industry’s first-ever Sustainable Clearing service to help market participants track and report how their hedging activities are advancing their sustainability goals. McCourt told IBS Intelligence that the flexibility of remote working played a pivotal role in launching those various derivates in the market.

The company throve this past year, as 2021 became what we will long remember as an incredible year for crypto. According to CoinGecko, the cryptocurrency market surpassed $3 trillion in value in November 2021, and top cryptocurrencies like Bitcoin and Ether also hit a new high, with Bitcoin surpassing its all-time high of $65,000, according to data from NerdWallet.

There are many reasons behind crypto gaining momentum over 2021, and “influential ambassadors” are surely among them. Notorious is the case of billionaire Elon Musk, CEO of SpaceX, and Tesla often tweeting about crypto, which more often than not has impacted their performance in the market.

Cryptocurrencies may go up in value and that is why some investors do not see them as a real investment but rather mere speculations. However, with new cryptocurrencies emerging every day, increasing mainstream adoption, and growing interest even from the most traditional financial institutions, that might not be the case anymore.