CME Group to Launch Micro Bitcoin Futures
Posted by Colin Lambert. Last updated: March 31, 2021
CME Group has announced the introduction of a new micro bitcoin futures contract on May 3, pending regulatory review.
The new contracts will be one-tenth the size of one bitcoin and, says the exchange, provide market participants with one more tool to hedge their spot bitcoin price risk or execute bitcoin trading strategies in an efficient, cost-effective way, all while retaining the features and benefits of CME Group’s standard Bitcoin futures.
They will join cryptocurrency derivatives already traded on CME, including the recently launched ether futures. CME says, with two days left in the forst quarter of 2021, 13,800 CME bitcoin futures contracts (equivalent to about 69,000 bitcoin) have traded on average each day. In addition, the ether futures have seen 767 contracts traded (equivalent to 38,400 ether) on average each day since launch on February 8.
The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate, which serves as a once-a-day reference rate of the US dollar price of bitcoin.
“Since the launch of our Bitcoin futures contract in 2017, we have seen steady, ongoing growth of liquidity and market participation in our crypto derivatives, especially among institutional traders,” says Tim McCourt, CME Group global head of equity index and alternative investment products. “The introduction of micro bitcoin futures responds directly to demand for smaller-sized contracts from a broad array of clients and will offer even more choice and precision in how participants can trade regulated bitcoin futures in a transparent and efficient manner at CME Group.”