Exchange operator CME Group said on Thursday it will launch 11 new futures indexes that will track the most popular altcoins, including staples such as Cardano and Solana. The indexes are in partnership with crypto index operator CF Benchmarks, and will launch later in April.
The firm will launch 11 products that will track some of the biggest altcoins, including Solana (SOL), Cardano (ADA), Polygon (MATIC), Polkadot (DOT), Stellar Lumens (XLM) and Uniswap (UNI). The move is a first for crypto futures, which have so far largely tracked top coins Bitcoin (BTC) and Ethereum (ETH).
CME’s Bitcoin and Ethereum futures are the most popular derivatives in the market, and are used as a basis for the biggest exchange traded funds. Today’s move is likely to drive a host of new instruments centered around altcoins, and is expected to drive a host of capital inflows.
Growing demand for altcoin futures
CME said in a press release that it saw increased demand for altcoins amid growing institutional interest in the crypto market. The exchange operator plans to collaborate with several major crypto exchanges, including Bitstamp, Coinbase, Gemini, and Kraken, to provide data for the indexes.
As the digital asset market continues to expand, there is an increasing demand for reliable, standardized cryptocurrency pricing information based on robust, regulated reference rates.
–Tim McCourt, CME Group Global Head of Equity and FX Products
Crypto futures are an important tool for big trading houses to gain exposure to the market, given that they allow traders to bet on prices without actually having to hold tokens. They are also useful in understanding how a token may behave in the near-term.
While digital asset managers such as Grayscale already have specialized indexes that track altcoins, CME is by far the biggest entrant to the space.
Altcoins see growing institutional demand
CME’s foray into altcoins reflects the growing demand for non-BTC and ETH tokens seen this year. The latest bull run saw top altcoins largely outpace their more established peers.
Trading patterns in major altcoins, such as large transactions, indicate that institutional interest is picking up.
Several other U.S. asset managers have also launched altcoin-related products for investors. Grayscale recently launched a non-ETH smart contracts fund consisting entirely of altcoins, while Coinshares launched an exchange-traded product that tracks Solana staking.