Turbulence in the broader crypto market has increased the use case for CME Group’s Cryptocurrency futures and options for a number of key reasons. This underscores the role that a regulated futures marketplace plays for the industry in terms of continuity of risk transfer and price discovery. As such, futures have become the venue in which institutions can efficiently gain short exposure. With uncertain and volatile markets, the ability to borrow and go short spot crypto has dried up. On March 13, 2023, with the failure of Silicon Valley Bank, CME Group Cryptocurrency futures once again proved their use case and saw their best trading day of the year, exceeding 90,500 contracts (representing more than $4.6 billion in notional traded).ĬME Group The Value of a Regulated Marketplace We saw it on November 8, 2022, following the FTX collapse, when CME Group Cryptocurrency products were traded in record numbers. Time and time again, with volatility in the underlying crypto markets, we see a migration of investors moving from more crypto native spot platforms to futures. In the wake of the collapse of prominent crypto firms and contagion concerns, the starting point for cryptocurrency investment decisions should center on risk management…and then risk management again.
has dampened the bond portfolios of banks, wiping out capital buffers – earmarked by the recent banking failures of Signature, Silvergate and Silicon Valley Bank.
Perhaps most notably, the pace of interest rate hikes in the U.S.
CENTER FOR DISCOVERY SERIES
Fast forward to 2023, we are now dealing with a series of significant market-moving events driving inflation to multi-decade highs.
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