Moscow Exchange prepares to launch Bitcoin index futures

Russia’s largest stock market, the Moscow Exchange, will offer a new crypto futures contract, this time based on its own recently introduced Bitcoin index.

The announcement comes after the exchange registered increased investor interest in its first such product issued earlier in June and based on a well-known Bitcoin ETF.

Moscow Exchange to launch Bitcoin index futures

The Moscow Exchange (MOEX) will soon present Russian investors with a new crypto derivative, its Managing Director, Vladimir Krekoten, unveiled in an interview with the business news portal RBC published on Tuesday.

The platform’s own Moscow Exchange PFI Bitcoin Index (MOEXBTC), first calculated on June 10, will serve as the underlying asset for the new instrument, the executive further revealed.

This will be the second offering of this kind by MOEX after it started trading Bitcoin futures earlier this month. On June 4, the exchange launched a futures contract for the Bitcoin ETF (exchange-traded fund) of American investment giant BlackRock.

Krekoten explained the decision to expand the lineup with investor demand. At the end of the first day of trading, the Bitcoin futures volume exceeded 420 million Russian rubles (over $5.3 million). The top manager detailed:

“Since then, the trading volume has amounted to a total of almost 7 billion rubles. Over 10,000 qualified investors have made transactions with it.”

The figures are similar to those for some instruments that have been traded on the exchange for several months, the report noted. Krekoten emphasized:

“Yes, we see interest now … These are very good indicators for such a short period of time the instrument has been in circulation on the market.”

BlackRock’s iShares Bitcoin Trust (IBIT) is the largest Bitcoin ETF by capital under management. According to data from the crypto investment research platform Sosovalue, it holds more than $70 billion in Bitcoin, accounting for over half of the capital of all U.S. Bitcoin ETFs as of June 23.

Spot ETFs based on Bitcoin (BTC), the leading cryptocurrency by market capitalization, provide exposure to crypto assets through shares offered on major exchanges such as NASDAQ and the NYSE. To issue the shares, the funds need to buy Bitcoin. Demand for these products created a significant influx of capital into the crypto market and became a major driver for growth last year.

MOEX plans to offer more crypto-related products

The Moscow Exchange intends to also launch mutual funds and structured bonds focused on cryptocurrency indices. According to the RBC report, this is currently being discussed with capital management companies.

Vladimir Krekoten remarked that the needed infrastructure is already in place. At the same time, he stressed that the development of this segment will depend on both market demand and the attitude of financial regulators in the Russian Federation.

The Central Bank of Russia’s decision to authorize the offering of crypto derivatives sparked a race between major players in the financial sector, including MOEX, Russia’s largest bank, Sber, and the Russian broker Finam.

Sberbank has already issued structured bonds, the yield of which is tied to the value of Bitcoin and takes into account fluctuations in the exchange rate between the Russian ruble and the U.S. dollar. The bonds are listed on the Moscow Exchange.

All cryptocurrency derivatives are currently available exclusively to “highly qualified” investors. The criteria to fall in this category are yet to be officially approved but it’s clear that the products are not meant for ordinary Russians.

In March, the Bank of Russia proposed a threshold of 100 million rubles ($1.25 million) in securities or deposits, as well as 50 million rubles in annual income, for private individuals who want to acquire crypto assets and derivatives under Russia’s special “experimental legal regime.”