CME Group to Expand Crypto Derivatives Offering with New Micro Bitcoin Futures Contract, Pending Regulatory Approval

CME Group, one of the world’s leading and most diverse derivatives marketplace, recently revealed that it would be expanding its suite of cryptocurrency derivatives with the launch of a new Micro Bitcoin futures contract on May 3, 2021 (subject to regulatory review and approval).

Micro Bitcoin futures will reportedly be one-tenth or 10% the size of one Bitcoin (BTC), which is trading at just under $57,000 at the time of writing (after recently reaching as high as $61,000+).

As noted in a release from the CME Group, the smaller-sized contract will offer market participants – from institutions to “sophisticated, active, individual” traders – with an additional tool that will help them with hedging 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.”

Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products, stated:

“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. 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.”

Micro Bitcoin futures will be joining CME Group’s growing suite of crypto derivatives products, which includes Bitcoin futures and options and the recently introduced Ethereum (ETH) futures.

As confirmed in the announcement, in 2021-to-date, 13,800 CME Bitcoin futures contracts (equivalent to appoximately 69,000 BTC) have traded “on average each day.” In addition, CME Ethereum futures have “seen 767 contracts traded (equivalent to 38,400 ether) on average each day since launched on February 8,” the release noted.

The announcement explained:

“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 U.S. dollar price of bitcoin. Micro Bitcoin futures will be listed on and subject to the rules of CME.”

For additional information on this product, check out the following: www.cmegroup.com/microbitcoin.

CME Group allows clients to trade futures, options, cash and over-the-counter (OTC) markets, “optimize” portfolios, and analyze data – “empowering market participants worldwide to efficiently manage risk and capture opportunities.”

CME Group exchanges provide a comprehensive range of global benchmark products “across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.” The company provides futures and options on futures trading via the CME Globex® platform, fixed income trading through  BrokerTec and foreign exchange trading on the EBS platform.

CME Group operates a leading central counterparty clearing providers, CME Clearing. With a wide range of pre- and post-trade products and services “underpinning the entire lifecycle of a trade,” CME Group also “offers optimization and reconciliation services through TriOptima, and trade processing services through Traiana.”

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