Chicago Mercantile Exchange (CME) Group, one of the world’s largest financial derivatives exchanges and trades in asset classes, announced in a press release its intentions of adding a new Micro Bitcoin futures contract on May 3 to its suite of crypto derivatives following the results of the regulatory review.
The new Micro Bitcoin futures will not be the same as one unit of Bitcoin, according to the announcement, one micro Bitcoin futures will be equivalent to one-tenth the size of one bitcoin.
Notwithstanding the size of the new products, CME plans to achieve some goals with the Micro Bitcoin futures while it still maintains the same features and benefits the standard Bitcoin futures that CME Group offers.
With the new product to be launched by May 3, market participants, from institutions to sophisticated, active, individual traders, will see another “tool to hedge their spot bitcoin price risk or execute bitcoin trading strategies in an efficient, cost-effective way.”
The Chicago-based exchange also deals with assets like agricultural products, currencies, energy, interest rates, metals, and stock indexes.
In a recent development, CME announced and launched its Ethereum Futures on February 8, 2021, to add to the company’s growing suite of cryptocurrency derivatives products.
The new Micro Bitcoin futures contract will be cash-settled, according to the CME CF Bitcoin Reference Rate, which serves as a once-a-day reference rate for the U.S. dollar price of BTC. The new futures contract, like every other product the company offers, will be listed on and subject to the rules of CME.
Regarding the launch of the new crypto derivatives, Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products said, “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.”
He continued, “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.”
