Finding a Trusted Path in the Crypto Derivatives Space: Q&A with Eurex

April 24, 2024

Our CEO Doug Schwenk spoke with Rafael Zanatta, Crypto Equity & Index Derivatives Sales at Eurex, to ask a few questions about finding a trusted path in the crypto derivatives space.

For a .PDF version of this conversation, please click here.

Doug: How does Eurex support institutional investors in the cryptocurrency space?

Rafael: We support institutional investors by providing exposure to cryptocurrency derivatives – as well as equity derivatives, fixed income derivatives, and FX through our established channels. These are the same channels used for trading all other asset classes. It doesn’t require extra setup or separate trading systems. This lowers the barriers for institutions to access exposure to crypto derivatives.

Doug: What are the biggest cryptocurrency regulatory challenges facing exchanges?

Rafael: We work with regulators on both sides of the Atlantic to ensure they are comfortable with the approach Eurex takes in bringing products to market while abiding by ESMA and CFTC regulatory standards. In conjunction with our product design partners, we address concerns regulators bring up to us before approval processes. We want to ensure our customers can access markets under proper regulatory frameworks without feeling compelled to navigate offshore or unregulated markets.

Doug: What safeguards have you implemented to help investors find a trusted path?

Rafael: We have brought crypto exposure to familiar places where our clients are comfortable trading. Bitcoin futures and options are subject to the same strict trading risk management safeguards our customers are familiar with from traditional equity and fixed income products, including: 

  • Transaction size limits
  • Price reasonability checks
  • Pre-trade risk quantity limits
  • Volatility interruptions

Doug: What trends are you seeing in the cryptocurrency derivatives space?

Rafael: There is a lot of work being done to expand market infrastructure in crypto derivatives trading worldwide. We have seen many traditional players building expertise in this market. It’s likely more household names will enter the crypto derivative space in the coming years.

The emergence of prime broker services in crypto is another trend to watch. These services will eventually evolve to resemble other already established asset classes. Consolidation is inevitable as we have seen multiple announcements and initiatives to start new exchanges. We are likely to see the emergence of one or two regional liquidity pools which will dominate that interest and training activity.

Doug: What’s on Eurex’s cryptocurrency horizon in 2024?

Rafael: Ethereum futures and options are a natural next step for us. We are also keeping a close eye on the development of other cryptocurrencies. There are many other coins investors have observed and would like to see in derivative contracts. We always consider if there is enough demand and liquidity before launching products so clients receive proper exposure as markets mature. The space will also mature with thematic and market cap indices.

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