CME Group Launches Micro Bitcoin Futures to Attract Retail Traders

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In Brief
  • CME the latest in a suite of offerings within the crypto derivatives asset class.

  • Micro Bitcoin-related futures options are likely to draw retail buyers.

  • CME Group has been deepening its involvement in the cryptocurrency space for a while.

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Chicago Mercantile Exchange Group (CME Group), one of the world’s leading derivatives exchanges, has announced the launch of Micro Bitcoin, the latest in a suite of offerings within the crypto derivatives asset class.

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Roughly one tenth the size of one bitcoin, Micro Bitcoin futures is expected to “provide an efficient, cost-effective way for a broad array of market participants – from institutions to sophisticated, active traders – to fine-tune their bitcoin (BTC) exposure and enhance their trading strategies,” according to Tim McCourt, CME Group’s global head of equity index and alternative investment products.

An option for traders of all sizes

As a smaller-sized contract, Micro Bitcoin-related futures options are likely to draw retail buyers with varying risk appetites, not just institutional ones.

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“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,” said Daniel Ryba, executive director of futures at E*TRADE Financial, an electronic trading platform.

CME deepens its involvement in the crypto space

CME Group has been deepening its involvement in the cryptocurrency space for a while. The company first suggested it was drawing up plans and seeking regulatory approval to create a bitcoin futures option back in October 2019, in response to consumer demand for crypto-related derivatives.

By December 2020, the company was averaging $880 million in daily trading volume for its bitcoin futures contracts. As of early 2021, the company announced that 69,000 bitcoins were being traded in contracts on its platform each day.

Then, CME Group to announce the launch of ether (ETH) futures contracts for its institutional traders. Since its launch on Feb. 8, approximately 38,400 ETH were reportedly traded in the form of options.

CME Group has also reported robust financial health in the first quarter of 2021, with a reported revenue of $1.3 billion and over half a billion dollars in net income. As of March 31, the company also had roughly $1 billion in cash. 

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