The Chicago Mercantile Exchange (CME) has announced plans to launch a new Bitcoin (BTC) derivative product that will allow traders to speculate on fractions of the flagship digital currency.
The CME Group’s micro bitcoin futures contract, due to be launched pending regulatory approval on May 3, is worth 0.1 BTC. The smaller contract size offers market participants an additional tool to hedge their Bitcoin price risk, CME said on Tuesday. CME’s current bitcoin contract unit is 5 BTC.
Tim McCourt, CME Group’s global head for equity index and alternative investment products, said:
“The introduction of Micro Bitcoin Futures responds directly to the demand for smaller contracts from a wide range of clients and provides even more choice and precision in how participants can trade regulated Bitcoin futures in a transparent and efficient manner with the CME Group.”
CME launched its Bitcoin futures contract in December 2017. The Chicago Board Options Exchange, its bigger nearby rival, was the first to introduce the derivatives contract that same month, but has since abandoned Bitcoin futures altogether.
CME has seen a steady surge in crypto derivatives trading since the first Bitcoin futures contract was launched more than three years ago. As previously reported by Cointelegraph, the average daily trading volume for CME Bitcoin futures rose 57% in January. Interest is set to accelerate as the Bitcoin bull market brings new investors to their knees.
There is also evidence that the broader crypto derivatives market is warming. As of December 2020, crypto derivatives businesses were valued at more than $ 1.3 trillion, according to CoinMarketCap, which is 55% of the total market.