Micro Bitcoin Futures To Be Launched On CME Derivatives Exchange In May

CME Group Inc (NASDAQ: CME), one of the largest derivatives exchanges in the world, said it would launch Micro Bitcoin futures contracts on its platform later this year.

What Happened: “Micro Bitcoin futures will be one-tenth the size of one Bitcoin,” said the CME Group in a press release. The smaller-sized contract will go live on May 3, and provide a wider range of market participants with another tool to hedge against their Bitcoin spot positions.

According to the group, traders will be able to get the same features of Bitcoin futures (BTC) in a smaller slice, while enjoying the benefits of trading on a regulated exchange.

The new contract will be cash-settled and based on the CME CF Bitcoin Reference Rate, which serves as the current reference rate for CME’s Bitcoin futures contracts.

Why It Matters: "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. 

McCourt also noted that the introduction of these Micro Bitcoin futures was a result of demand for smaller-sized contracts from a broad array of clients.

Over 13,800 CME Bitcoin futures contracts and 767 Ether futures have traded hands each day, since the beginning of 2021. While CME’s traders have largely been institutions, these new “mini futures” could potentially open up a new demographic of active retail for the derivatives exchange.

Price Action: Bitcoin was trading at $58,903 at the time of writing, up 2.43% after an influx of announcements that had a positive impact on its price over the past 24-hours.