US global markets company Chicago Mercantile Exchange (CME Group) has announced the launch of a new bitcoin futures product for the third quarter. Announcement in May 2021, subject to approval by U.S. regulators. The new contract is a micro bitcoin futures product that represents 0.1 bitcoin, rather than five bitcoins like the other CME contract. This smaller contract is designed to make investing in bitcoin futures more accessible to a wide range of clients.
CME Group launches futures contract for micro-bitcoin
Well-known futures marketplace CME Group has announced the launch of a new futures product that is smaller than the contract representing five bitcoins (BTC). The new product, which is yet to be approved by regulators, will be a micro futures contract with exposure to 0.1 BTC. It’s essentially one-tenth the size of bitcoin, and the company thinks investors will be interested in the small product.
Tim McCourt, global head of equity indices and alternative investment products at CME Group, said CME has seen great growth since the launch of BTC futures in 2017. Since launching our bitcoin futures contract in 2017, we have seen steady and consistent growth in liquidity and market participation in our crypto derivatives, particularly among institutional traders, McCourt said in announcing the micro bitcoin futures.
The head of alternative investment products added:
The introduction of Micro Bitcoin Futures is a direct response to demand for smaller contracts from a variety of clients and will provide even more choice and precision in how participants can trade regulated bitcoin futures contracts in a transparent and efficient manner at CME Group.
Latest Bitcoin and Ethereum CME derivatives are growing
In 2017, the revelation that CME Group and Cboe were considering joining the bitcoin economy drove up the price of the asset. However, later the Chicago Board Options Exchange (Cboe) stopped offering bitcoin futures. The CME, meanwhile, has been beating its global competitors to become one of the largest bitcoin futures exchanges in the world by November 2020. The following month, the CME announced that it would also offer Ethereum (ETH) futures contracts.
If approved by regulators, microbitcoin futures will join the BTC and ETH contracts that CME already offers. The CME reports that contracts worth about 69,000 bitcoins and 38,400 ethers have been traded daily since the launch of the ETH product. Like the BTC Five Contract, the micro Bitcoin futures product will reference the CME CF Bitcoin reference price and all settlements will be in cash.
What do you think about the CME launching a micro bitcoin futures contract? Let us know what you think about this topic in the comments below.
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