Digital Assets: CME Group Makes Bitcoin Futures More Accessible, Launches Micros

March 31, 2021 | Digital Assets, News

Trading in micro bitcoin futures will launch on May 3.

CME Group has added a new product, Micro Bitcoin Futures, to its existing suite of crypto derivatives. The CME will introduce the new future contract on May 3, subject to regulatory review.

Constituting one 10th the size of one regular bitcoin contract (which has a size of five bitcoin), the micro bitcoin futures contract will enable more market participants to trade the leading cryptocurrency. (CME Group)

In recent months, there’s been huge interest in bitcoin on forums such as Reddit where individual, mostly millennial, traders have been buying into cryptocurrencies at higher and higher prices.

“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. “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.”

Advantage: Micros

Micro bitcoin futures will offer exposure of 0.1 bitcoin, will retain the features and benefits of standard bitcoin futures, and will be cash-settled based on the CME CF Bitcoin Reference Rate.

They present an efficient, cost-effective new way to customize bitcoin exposure and fine-tune crypto trading strategies. Traders of all sizes can therefore better manage their bitcoin price risk.

“Smaller contracts will allow more people to participate and increase liquidity,” said John Wu, president of the crypto firm Ava Labs, to Reuters. “This will allow hedging and ultimately lower volatility in bitcoin. In the long run, it will be a good thing for utility in crypto.”

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