CME Group is known for its diverse derivatives product portfolio including FX and crypto derivatives and the company’s latest announcement excited the traders with the premise of another level of diversification. Nearly two and a half years after the launch of the first Bitcoin futures in the market, not the company is planning to introduce a micro Bitcoin futures contract in May.
This smaller-sized contract will rely on the same reference Index, the CME CF Bitcoin Reference Rate, and be settled in cash. The index has been improved with the support of CF Benchmarks to offer real-time BTC price in dollars.
The debut date of the micro contract is expected to be May 3 and it will have 1/10 of the notional value of the original contract. Like all the other new products, CME’s mini Bitcoin futures will be reviewed by the regulatory organs. The company is trying to make the product ready for purchase just after the announcement of approval.
This move is beneficial for those who want to invest in Bitcoin but cannot do it due to the high level of costs. The micro futures allow them to participate in different markets even though they have limited capital and that is how Chicago-based CME can attract new customers.
Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products said: “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,”
All these updates are highly correlated with the good performance of the cryptocurrency, which soared 300% since the start of the year. The timing of the decision also makes sense, which comes one month after the announcement of Ether futures contracts. Clearly, CME tries to expand its dominance in the industry.