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The CME micro Bitcoin futures allows retail players and individual crypto investors to deal with small-sized contracts thereby ushering more market liquidity while giving the smaller players equal exposure to a regulated environment.
On Monday, May 3, the Chicago Mercantile Exchange (CME) announced the launch of the Micro Bitcoin Futures in a move aimed at expanding its crypto derivative products. Over the last year, Bitcoin has gained significant price appreciation and momentum.
Thus, the demand for Bitcoin derivative products has also surged. While CME was indeed the first to launch the Bitcoin Futures, it was largely available only to institutional players. The cash-settled CME Bitcoin futures is one of the most popular Bitcoin derivative products.
However, to give retail investors and small players access to BTC derivatives, CME has now launched the micro BTC futures. The CME micro Bitcoin Futures represent one-tenth the size of one Bitcoin. Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products said:
“We are pleased to introduce this new contract at a time when we continue to see consistent growth of liquidity and participation in our crypto futures and options. At one-tenth the size of one bitcoin, Micro Bitcoin futures will provide an efficient, cost-effective way for a broad array of market participants – from institutions to sophisticated, active traders – to fine-tune their bitcoin exposure and enhance their trading strategies, all while retaining the benefits of CME Group’s standard Bitcoin futures.”
Micro Bitcoin Futures: The Power of Small-Sized Contracts
Bitcoin’s popularity is at its peak in the current times. Thus, such small-sized contracts will allow participation from sophisticated individual clients in the market. Besides, it also addresses one of the major issues associated with Bitcoin i.e. the high cost of owning an asset and the desire to engage in a regulated environment.
With the small-sized contracts, the options for CME’s micro Bitcoin futures will also attract retail buying. Daniel Ryba, Executive Director of futures at E*TRADE Financial said:
“Offering Micro Bitcoin futures allows us to provide our customers with even more choice and precision in how they trade Bitcoin futures. The smaller contract size enables traders of all sizes – from institutions to active retail traders – to get exposure to bitcoin prices, or hedge their spot bitcoin positions. We are excited to support this product.”
As said earlier, the micro futures offers more granular exposure on BTC futures. Similar to the larger derivative product, the CME micro BTC futures is also cash-settled.