Eurex Launches Bitcoin and Ethereum Nano Futures and iShares Bitcoin ETP Options

Europe's flagship derivatives exchange is expanding its cryptocurrency offering with a set of products designed to broaden access for retail and institutional investors.

As of May 5, Eurex launched a new range of nano futures on FTSE indexes of Bitcoin and Ethereum, in addition to options on the iShares Bitcoin ETP. This positions Eurex as a key venue for regulated, exchange-traded digital asset instruments in the European market.

The nano futures offer exposure to just one-hundredth of a Bitcoin or Ethereum token, which is a fraction of the size of standard or even micro futures.

“Smaller investors will benefit from lower upfront costs”

“These new products are being introduced to meet the needs of smaller investors who value precision and affordability, especially as Bitcoin trades in the €80,000–€100,000/$89,000–$111,000 price range,” said Nicolae Raulet, Product and Business Development at Eurex.

The products will benefit from the infrastructure of Eurex’s well-established clearing environment and the contracts are cash-settled.

“Users will also benefit from lower upfront costs and other traditional benefits of the exchange-traded format, such as transparency and capital efficiency.”

A tier-one liquidity provider is already committed to supporting the nano futures with competitive bid/offer spreads in the order book from the start.

In parallel, Eurex launched euro- and USD-denominated options on the iShares Bitcoin ETP, referencing XETRA and Euronext Amsterdam prices.

The options are the first of their kind in Europe and they arrive shortly after BlackRock’s flagship Bitcoin ETP passed €200 million ($210 million) in assets under management.

“Those who invest in the European ETP can now effectively manage their downside protection, sell calls during calmer market conditions and trade volatility”

“Options are a crucial addition to the evolution of any ETF ecosystem. Those who invest in the European ETP can now effectively manage their downside protection or sell calls during calmer market conditions to generate additional premium income. Another interesting strategy is to trade volatility through combinations of different strikes and maturities.”

The futures and options products offer different advantages. ETPs provide a direct path to investing in Bitcoin via brokerage platforms, while futures offer leveraged exposure and traders aren't required to take custody of the underlying asset thanks to the exchange's clearing house.

The combination of nano futures and ETP options now enables a crypto futures spot basis trade—a popular strategy in the US—to be executed in a European exchange environment.

“Those who invest in the European ETP can now adjust leverage, protect downside, capture upside convexity or pursue yield enhancement strategies through premium writing.”

The iShares Bitcoin ETP options are also expected to attract institutional users such as asset managers and hedge funds who are already familiar with trading similar instruments, like iShares Physical Gold ETF options.

“Options offer a greater range of flexibility in trading—a feature that will naturally attract a wider diversity of investors over time.”