CME Solana futures shine at debut; significant first counterparty
SEC quietly drops last high-profile crypto prosecution
Bitcoin ETF flows show tentative revival
Meet us at the Exchange conference - March 23 - 26, 2025

Shine

Then there were three. CME Group, the world’s dominant derivatives marketplace, now offers exposure to a third crypto, with CME Solana Futures. Continuing its evidently cautious approach, it's just over 7 years since the first CME digital asset contracts were launched, Bitcoin futures, and 4 years since Ether futures became available for trade, in February 2021.

Just like for all other CME digital asset products, settlement is based on CF Benchmarks' methodology. In the case of Solana futures, their index is our regulated CME CF Solana Dollar-Reference Rate (SOLUSD_RR).

Micro + Larger

The debut of both a ‘micro’ CME SOL contract (25 SOL) and a larger contract size (500 SOL) simultaneously, is unusual. Smaller contract sizes of the marketplace’s Bitcoin contracts took over 3 years to become available. Ether micros came 10 months after their full-sized counterparts were launched.

Still, assuming smaller contract sizes are intended to enable greater accessibility and flexibility, the release of both SOL and Micro SOL trading at the same time seems in line with the recent roll-out of most CME crypto products on Robinhood Crypto, the digital assets arm of the retail-orientated platform operator.

Larger and micro SOL are in keeping with palpable CME efforts in recent years to broaden access beyond traditional participants – i.e., those large enough to meet CFTC reporting thresholds. These efforts were exemplified last year by the advent of the group’s first weekly expiring crypto contracts, Bitcoin Friday futures (BFF).

FalconX lands first trade

The first trade of the new contracts was a block trade, executed a day before public trading opened, between FalconX, the leading digital assets prime brokerage for major institutions, and StoneX, the broad-market institutional liquidity provider. Typically, such transactions are at least partly ceremonial and promotional, though the counterparties may also be telegraphing one way they’re likely to use the new contracts going forward.

Among myriad services offered by FalconX are several OTC crypto contracts settled against regulated CF Benchmarks indices, like the CME CF Bitcoin Reference Rate, and the CME CF Ether-Dollar Reference Rate, among others.

“This highly anticipated launch marks a historic moment for the Solana ecosystem, allowing institutional investors to manage risk and price exposure on a regulated venue. We're committed to offering innovative derivatives products to support a maturing market.

Josh Barkhordar, Head of US Sales at FalconX, quoted in CME Group press release.

Day one

As for appetite for the new contracts, it’s obviously too early for a clear picture of demand to emerge; and CME is unlikely to release a substantial SOL open interest or volume summary till its regular monthly cryptocurrency update.

On the face of it, first-day volume and open interest appeared to be healthy, as shown below.

That said, an intriguing first-day-of-trade comparison with the first days of trade for CME Bitcoin and Ether futures trading was collated from CME data by brokerage and investment services group K33 Research.

CME SOL open interest and volume were lower on an absolute basis than OI and volumes amassed on the first day of trading of both CME Bitcoin and Ether futures.

This should perhaps come as no surprise, looked at in proportion to Solana’s place as the 4th largest cryptoasset by free float market capitalization. SOL’s market capitalization was almost $69bn on the day of the CME futures launch.

Its weighting within CF Benchmarks' CF Ultra Cap 5 index (CFUC5) was approximately 4.2% at the time of writing. CFUC5 is our regulated benchmark that tracks a free float market capitalization weighted portfolio of the 5 largest cryptocurrencies. Solana was above Cardano (ADA), weighted at about 1.5% and below XRP, which had a circa 7.3% weighting.

Of course, these data snapshots aren’t displaying where these metrics stood on the days when futures on the largest two assets represented by CME crypto derivatives, Bitcoin and Ether, were listed. Indeed, Solana didn’t exist at the time of the CME BTC debut.

Still, K33 noted that adjusted for market value, the launch of SOL futures was fairly in line with the Bitcoin and Ether debuts.

Meanwhile, as we’ve noted, the availability of CFTC regulated futures contracts on SOL, at the primary futures market, is quite likely to eventually have an impact beyond initial demand for the futures themselves.

Perhaps even more of an impact than can be expected from the market structural benefits that accrue from the existence of a regulated tool for risk management and strategic trading, bringing SOL even further into the mainstream realm.

We discussed the potential for the launch to accelerate prospects of approval for spot SOL ETFs, here.

See you at Exchange!

Meet us at Booth A-036 - A-039, Virgin Hotels, Las Vegas, March 23 - 26, 2025

CF Benchmarks will once again have a major presence at this year’s Exchange, the conference experience for U.S. financial advisors, with a big focus on ETFs.

As one of the earliest and longest-standing crypto related contributors, CFB has been a consistent and proud sponsor of the event; quietly providing an additional pathway for client education, which helped fuel the significant adoption we’ve seen over the last few years.

This time, we’re a sponsor alongside our parent company, Kraken, so why not schedule a pit stop at our booth - and check out The Atlassian Williams Racing FW47 sponsored by Kraken!

As usual, we’d love to continue earlier conversations, or start new ones. For instance, about our leading regulated digital asset indices, now referenced by around $80 billion in client assets, and counting.

As well, don’t miss the roundtable, on Sunday, March 23, at 4 pm, during the Industry Conclave, at 24 Oxford, hosted by our CEO, Sui Chung.

Sui will be joined by David Mann, SVP, Head of ETF Product and Capital Markets at Franklin Templeton, and Ryan Rasmussen, Head of Research at Bitwise Asset Management.

Discussion topic:

"Crypto: How to Approach the Asset Class Beyond Bitcoin and Ether.”

Click here, to book a catch-up with a member of our team.

SOL, XRP prospects advance

As noted at the start of the year, the next wave of U.S.-listed ETFs could have one of two key paths to market, the ‘old way’, involving the emergence of CFTC regulated futures as a first step, or; an emergent ‘new way’. The latter essentially requires the SEC to quietly dismantle its unspoken protocols; enabling crypto filings to establish approvability on their own merits.

With CME Group moving forward with contracts in only the third crypto on its marketplace, Solana, events are beginning to point to the established path prevailing, at least for now. This is good news for the several live SOL exchange traded product filings at the SEC right now, many of which are under active review.

Active Solana ETF filings

Futures ETF step

The emergence of an ETF tracking CME SOL futures within a few days of the contracts themselves looks like another incremental step. It echoes those that preceded the ultimate achievement of U.S. spot Bitcoin and Ether ETFs. Volatility Shares Solana ETF (ticker: SOLZ) will provide exposure to Solana futures. Meanwhile Volatility Shares 2X Solana ETF (SOLT) will offer twice leveraged exposure.

Notably, it took several months for Bitcoin and eventually Ether ‘Strategy’ ETFs to secure SEC approval after BTC and ETH CME contracts began trading. Leveraged futures funds in both took longer still.

Solana futures and Solana futures ETF momentum almost certainly bodes well for the spot ETF filings; though exactly how well is open to question, of course.

Stars align for XRP ETF filings as SEC drops case

The other equally consequential development for digital asset investment products was of course the long and widely anticipated final capitulation of the SEC in its complaint against Ripple Labs.

With news that the SEC dropped its appeal against the group, which is closely associated with XRP, applications to list spot funds based on that token, have seen their prospects of a successful outcome take an important step forward.

Markets

The following piece contains contributions and excerpts from CF Benchmarks Quarterly Attribution Reports - March 2025 by Gabe Selby, CFA, and Mark Pilipczuk.

Insights from our Quarterly Attribution Reports

As we’ve seen in recent weeks, cryptoassets on aggregate, including Bitcoin, have not evinced their well-established, though generally longer-term, low-to-no correlation to traditional risky assets, instead falling in unison with the sharp downturn, chiefly in stocks.

This trend has been quantified by the CF Benchmarks research team, Head of Research Gabe Selby, CFA and Research Analyst Mark Pilipczuk, in their recent quarterly market review, structured as the CF Benchmarks Quarterly Attribution Reports.

The compiled edition of the most recent quarter is aptly sub-titled: “Executive Orders & Market Disorders.”

In it, the analysts detail how the favourable tailwind many asset classes experienced from bullish sentiment on the back of the incoming U.S. administration, has been dissipated by subsequent macroeconomic and geopolitical uncertainty; triggered by the new executive’s commitment to tariffs.

The chart below depicts the return trend of the quarter for key CF Benchmarks portfolios. These include those within our Capitalization Series, some measuring large cap beta, others tracking more diversified exposure. Select Classification Series indices – which represent a variety of thematic exposures – are also shown.

Selby and Pilipczuk also spotlight the pattern of diminishing market breadth within the quarter, noting it “has deteriorated back to pre-election levels”, with 82% of large-cap crypto constituents trading below their 200-day simple moving average, as of March 12th; a significant reversal from the broad participation seen during Q4.

Download full report

ETF bounce

The market reversal was accompanied by U.S. Bitcoin ETF outflows amounting to some $1.5bn between January and late February, and the biggest one day outflow on February 25^th, of about $1.01 billion, according to the SoSoValue data platform.

Since then, the flow trend has shown signs of moderate improvement, at least for spot Bitcoin ETFs. They recorded their largest single day inflow since early February – $274.59m – at the beginning of the current week.

By contrast, the Ether ETF product class as a whole continues to paint a disappointing picture, posting a ninth consecutive day of negative flows on March 17th. That said, it’s worth reminding that one fund has quite consistently been the chief weight on this group. Cumulative net outflows from Grayscale Ethereum Trust since its conversion to an open-ended exchange listed fund are now approaching $4.2bn, leaving around $2.4bn in net assets, and suggesting the overall direction of travel for spot Ether fund assets may remain negative for the foreseeable future.

Further qualification of the apparent plateauing of fund trends over the last few weeks were provided by CF Benchmarks CEO Sui Chung, in an interview on TheStreet’s Roundtable series this week.

“Let’s remember when the spot Bitcoin ETFs launched, the price was around $50,000 per Bitcoin, went up to a high of about $107,000 and is currently in the sort of $84,000 range,” he said. “So it had more than doubled since the launch of the spot Bitcoin ETFs. Many investors understandably want to lock in some profits.”

CF Benchmarks CEO Sui Chung

Click here to watch the video interview.

Mar 22, 2025

CF Benchmarks Newsletter - Issue 78