According to data submitted to the U.S. Commodity Futures Trading Commission (CFTC) on October 7, Nadex, Crypto.com’s North American derivatives exchange, has listed derivatives contracts related to memecoins such as PEPE and FLOKI.
According to the filing, Nadex also listed derivatives related to Dogelon Mars (ELON) and BONK.
The combined market capitalization of the four memecoins underlying Nadex contracts is nearly $7 billion, according to CoinMarketCap.
This contract adds to Nadex’s existing suite of cryptocurrency derivatives, including contracts linked to blockchain network tokens such as Bitcoin (BTC) and Ethereum (ETH).
Nadex memecoin contract. Source: CFTC
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So-called “touch bracket” contracts are hedging tools designed to pay out if the spot price of a token reaches an agreed-upon upper or lower limit before the contract expires.
“Touch bracket contracts are not only quite popular in highly volatile markets such as cryptocurrency markets, but also inherently minimize the potential for contract manipulation due to their unique structure,” Nadex said in the filing.
Cryptocurrency derivatives are proliferating on regulated U.S. exchanges, including traditional trading platforms such as the Chicago Mercantile Exchange (CME).
Last September, the U.S. Securities and Exchange Commission (SEC) approved listing options related to BlackRockc’s BTC exchange-traded fund (ETF), iShares Bitcoin Trust (IBIT), on Nasdaq.
That option awaits final approval from other agencies, including the CFTC.
According to the filing, the total trading volume of Nadex contracts linked to BTC, ETH, and Litecoin (LTC) in 2023 exceeded 28 million contracts.
“The exchange therefore continues to expand its cryptocurrency commodity derivatives offerings to meet public demand for diverse and regulated products,” Nadex said.
Derivatives exchanges such as Nadex self-certify derivatives that they believe comply with existing regulations. The agreement does not require explicit regulatory approval prior to listing.
Derivatives exchange Kalshi listed event contracts betting on the outcome of the U.S. election on October 7, after winning a landmark legal battle with the CFTC in September.
On October 8, Kalshi added another political event contract to the roster, allowing traders to bet on whether New York City Mayor Eric Adams will resign after being indicted on bribery charges in September.
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