Approximately two and half years after the launch of the world’s first Bitcoin futures, The CME Group is looking forward to bringing another level of diversification for cryptocurrency traders. The Global Market is launching another micro Bitcoin futures contract.
The smaller-sized contract is closely tied to its older brother, has only 1/10 of the notional value of the original BTC contract.
The contract is based on the same underlying reference index as the CME CF Bitcoin Reference Rate and will be settled in cash. The index facilitates real-time BTC prices in dollars. The index references the pricing of data using transactions and order activities, from multiple cryptocurrency exchanges. It is currently made up of Kraken and Bitstamp.
The micro contract, which is expected to debut on May 3, will have just 1/10 of the notional value of the original contract. CME’s mini futures are on the first preference of cryptocurrency that is being reviewed by regulators. The exchange operator confirmed that once the addition clears, the contract will become available for the purchase.
According to the Chicago-based CME,
One-tenth the size of standard contracts is also introducing professional traders to many benefits when trading these limited-risk contracts.
Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products said:
According to the latest metrics provided by the CME Group for Bitcoin futures, it has averaged 13,800 contracts per day in 2021. Calculating around 69,000 Bitcoin apparently, it represents institutional interest.
Both figures are a result of more than a year of increasing prices for Bitcoin, which skyrocketed by approximately 300% in 2021.