Libor alternative streaks ahead of bitcoin futures

CME Group, the world’s largest futures exchange, has launched two notable futures contracts in the past nine months.

One, bitcoin futures in December, has received massive attention. To rather less fanfare, in April it debuted futures on Sofr, US authorities’ preferred alternative to the Libor interest rate benchmark. Less than five months on, and already the latter is beginning to show signs of strength.

In 85 trading days, the Chicago exchange has had a cumulative notional volume in Sofr futures of $711bn, or 278,000 contracts. There has been more than $105bnin notional open interest on Sofr futures, with more than 6,000 contracts a day traded in August.

Some of that early demand is because household institutions such as Fannie Mae, MetLife and the World Bank have begun issuing debt that uses Sofr, rather than Libor, as its reference rate.

By contrast, in 181 days of trading bitcoin futures, cumulative notional volume is $25bn, from 624,000 contracts. There have been about…