CME Group to Launch Another Micro Bitcoin Futures Contract 

Deepshikha  |  Mar 31, 2021

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.

Micro Bitcoin Futures Contract has Only 1/10 of Notional Value

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,

“The move marks a new development in the nascent crypto futures market that will give new access to retail investors, either those looking to branch into different markets or struggling to participate due to limited capitalization.”

One-tenth the size of standard contracts is also introducing professional traders to many benefits when trading these limited-risk contracts.

CME Group Sees Increasing Institutional Demand for BTC Contracts

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

“The introduction of Micro Bitcoin futures responds directly to demand 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.”

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.

Related News