One of the world’s largest derivatives exchanges, the Chicago Mercantile Exchange (CME), is planning to launch micro bitcoin futures contracts in May, thus enabling traders to speculate on fractional units of BTC. CME’s new product is, however, pending approval from U.S. regulators.
CME Group Expands Bitcoin Offering To Include Small-Sized Futures
According to an official announcement on March 30, the new offering will be one-tenth the size of one bitcoin. For perspective, the standard CME futures contract is sized at 5 BTC (equivalent to $295,000). In contrast, the new micro futures contract will be worth 0.1 BTC — or $5,900.
These micro futures contracts will provide institutional investors and small individual traders another tool to hedge their bitcoin price risk and will be cash-settled against the CME reference rate that includes data from major crypto exchanges like Coinbase, Gemini, Kraken, itBit, and Bitstamp.
Tim McCourt, CME Group’s global head of equity index and alternative investment products, explained that the new product is being launched in response to high demand for smaller contracts from a wide range of clients.
“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 should be noted that the micro futures come with all the features and advantages of the exchange’s normal bitcoin futures that were launched in December 2017.
Earlier in February, …
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