CME Group Reports Surge in Demand for Micro BTC Contracts

CME Group’s trading volumes for micro bitcoin futures have gone beyond 100,000 contracts.CME Group, one of the largest derivatives exchanges in the US, has reported a huge demand for Micro BTC futures launched less than a week ago. The exchange launched the micro BTC futures on May 3 to meet demand from retail investors.Enhancing Bitcoin ExposureAccording to CME, the micro contracts will be an ideal and cost-effective way for small traders to gain some form of exposure to Bitcoin without risking large amounts of investments. Such traders would also gain trading insights for Bitcoin trading through micro contracts.Tim McCourt, the group’s head of equity index and alternative investment products, said, “We are pleased to see strong customer adoption and support for our new Micro Bitcoin futures contract early on.”The micro contracts are similar to the other Bitcoin futures offered by CME Group. They are equivalent to a tenth of Bitcoin tokens. The contracts are settled in cash, and they track the price of an asset from the CF Bitcoin Reference Rate offered by CME. This price is equivalent to the daily value of Bitcoin in US dollars.Leading the Crypto Derivatives SpaceCME group first created Bitcoin derivatives in 2017. This was after their major competitor, Cboe, launched the same product. However, Cboe was unable to work out the product’s offerings and later stopped the sale. On the other hand, CME Group has continued offering the product, and its demand has greatly increased over the years.Besides micro BTC contracts, CME Group also offers Bitcoin options and Ethereum futures. The firm has launched these new products to meet the increasing demand for crypto investments.

According to McCourt, “Together with our existing, full-sized Bitcoin futures, this new, smaller contract further strengthens our ability to help a broad array of clients – from institutions to sophisticated, active traders – to manage their bitcoin price risk.”

With the high demand for cryptocurrencies recorded since the beginning of the year, firms in the sector have been forced to research and develop new products that will meet the rising demands. New traders in the sector who are cautious with their investments prefer to invest indirectly in the crypto market space to get exposure. Bitcoin futures and options have been created for this purpose and the demand witnessed by CME Group is proof that crypto users want to diversify their crypto portfolio.


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