The Chicago Mercantile Exchange (CME) has officially launched its latest Bitcoin (BTC) derivative product, paving the way for broader acceptance of digital assets in the mainstream.
TIm McCourt, global head of CME Group's equity index and alternative investment products, said the new product will provide “an efficient and cost-effective way for a wide range of market participants – from institutional institutions to sophisticated, active traders – to optimize their Bitcoin products. Engagement and improvement of their trading strategies. "
The micro bitcoin futures contract is worth 0.1 BTC and offers traders an additional tool to hedge their price risk for digital currencies.
J. B. Mackenzie, executive director of TD Ameritrade Futures and Forex, said that micro bitcoin futures address the two biggest problems of investing in cryptocurrencies – "namely, the high cost and the desire to get involved in a regulated environment".
With the growing demand for smaller contracts, CME Group first announced its intention to launch a micro-BTC derivative product on March 30th. At the time, 1 Bitcoin was worth around $ 58,000, which is not dissimilar to current prices. The leading digital currency surged over $ 64,000 in April before hitting a wide decline.
The use of cryptocurrency derivatives has grown exponentially since CME launched the first Bitcoin futures contract in December 2017. Though the Chicago Board Options Exchange quickly followed, the Crosstown rival would eventually ditch the product offering altogether.
Crypto derivatives trading accounted for 55% of the total market in December 2020. That number is likely to grow as derivatives exchanges like Bybt, FTX, and BitMEX continue to be the go-to place for traders looking for oversized exposure to digital assets.