2021-3-30 19:39 |
CME Group is expanding its crypto derivatives products with the introduction of new Micro Bitcoin futures contracts on May 3.
The contracts that are pending regulatory review will be one-tenth the size of one Bitcoin. The regular Bitcoin futures contract on the platform involves 5 BTC, which are expensive for most of the retail at the current price of $58,500 per Bitcoin.
Smaller-sized contracts are introduced to provide the market participants that include institutions, sophisticated, active, individual traders with one more tool to hedge their spot bitcoin price risk efficiently and cost-effectively while retaining the features and benefits of standard Bitcoin futures.
“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,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products.
Micro Bitcoin futures will be cash-settled, he said, responding directly to the demand for smaller-sized contracts.
Just last month, CME had launched Ethereum futures, and since then, 767 contracts, equivalent to 38,400 Ether, on average have traded each day.
As for Bitcoin futures, in 2021 to date, 13,800 contracts equivalent to about 69,000 BTC have traded on average each day.
This week, Cboe Global Markets CEO Ed Tilly also said they haven’t given up on Bitcoin futures and are “still interested.”
Cboe actually launched Bitcoin futures before CME only for the latter to gain wider acceptance and the former to delist them in March 2019.
“There’s a lot of demand from retail and institutions, and we need to be there,” said Tilly.
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