The new cryptocurrency trading options are coming at the end of September
The Chicago Mercantile Exchange (CME) Group is set to introduce a new type of Bitcoin futures contract aimed at catering to the growing interest among retail investors. According to a report shared yesterday, CME will launch these new Bitcoin Friday Futures (BFF) on September 30. The new futures contracts will be much smaller in size, allowing for more accessible trading for individual investors.
These new contracts will be sized at one-50th of a Bitcoin, making them more manageable compared to other retail-focused Bitcoin futures products. For example, Coinbase’s “nano” Bitcoin futures are sized at one-100th of a Bitcoin. This smaller size offers greater flexibility for investors, enabling them to adjust their Bitcoin exposure more precisely.
The BFF contracts will be cash-settled each Friday, using the CME CF Bitcoin Reference Rate New York Variant (BRRNY) as a benchmark. This rate reflects the spot price of Bitcoin, providing a reliable reference for the settlement of these contracts.
CME’s introduction of these smaller Bitcoin futures comes at a time when the popularity of cryptocurrency futures is on the rise in the US. As of August 20, the open interest on CME’s existing Bitcoin futures contracts had nearly reached 30,000, underscoring the increasing demand. Each of these existing contracts is sized at 5 BTC, making the new BFF contracts a more accessible option for smaller investors.
The CME Group is not alone in the market, as it faces competition from other platforms like Coinbase Derivatives, which offers futures contracts for Bitcoin and other cryptocurrencies such as Ethereum, Litecoin, and Dogecoin. The introduction of these smaller futures contracts is expected to appeal to a broad range of traders, from institutions to individual investors, providing them with a cost-effective way to gain exposure to Bitcoin and implement new trading strategies.
