CME Group Launches Micro-Bitcoin Futures Contract

May 5, 2021 | News

The contracts will be cash-settled and 1/10th of the size of a Bitcoin.

With the increasing retail demand for cryptocurrency derivatives, Chicago-based CME Group launched micro Bitcoin futures in the United States on Monday, which is a smaller-size version of its existing Bitcoin derivatives contract.

The US derivatives exchange giant first revealed the specifications of these micro Bitcoin futures contracts in March. These contracts will be 1/10th of the size of a Bitcoin and are likely to widen the existing client base of the exchange with demand for crypto derivatives.

“At one-tenth, the size of one bitcoin, Micro Bitcoin futures will provide an efficient, cost-effective way for a broad array of market participants, from institutions to sophisticated, active traders, to fine-tune their bitcoin exposure and enhance their trading strategies, all while retaining the benefits of CME Group’s standard Bitcoin futures,” said Tim McCourt, CME Group’s Global Head of equity index and alternative investment products.

The Rise in Crypto Derivatives Demand

CME launched its first Bitcoin derivatives in December 2017, which coincided with the Bitcoin touching the iconic $20,000 mark for the first time.

With demand for the crypto derivatives in the United States, the exchange expanded its offerings with the launch of the Bitcoin options and Ethereum futures. In addition, it has become the third-largest Bitcoin derivatives venue globally with an aggregated open interest of around $2.5 billion.

Similar to the CME’s older Bitcoin futures, the micro contract is based on the same underlying reference index, the CME CF Bitcoin Reference Rate, and will be settled in cash.

“The Micro Bitcoin futures meet a real market need for more granular exposure on Bitcoin futures,” said Joshua Lim, Head of Derivatives, Genesis Trading. “More investors will be able to access and trade this market, and options liquidity providers like Genesis will be able to delta hedge with more precision.”


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