The launch is pending subject to regulatory review, but it will offer clients the opportunity to trade contacts one-tenth the size of one Bitcoin, compared to the existing product where one contract is worth five Bitcoin.
The aim of launching a micro futures contract it to provide market participants with another tool to hedge their spot Bitcoin risk, or to take up negative exposure.
“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.
— FXHedge (@Fxhedgers) March 31, 2021
“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.”
It’s worth noting that the launch of CME’s Bitcoin futures product in December, 2017, marked the top of Bitcoin’s hype-fulled bull market, which eventually saw the price of BTC trickle down from $20,000 to less than $4,000.
In 2021-to-date, 13.8K CME Bitcoin futures contracts (equivalent to about 69,000 Bitcoin) have traded on average each day. In addition, CME Ether futures have seen 767 contracts traded (equivalent to 38,800 ETH) on average each day since launched on February 8.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.