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CME Group to Launch Smaller Bitcoin Futures For Retail Market

CME Group to Launch Smaller Bitcoin Futures For Retail Market

CryptoNewsCryptoNews2024/08/27 21:51
By:Trent Alan
Last updated:
August 27, 2024 03:40 EDT

CME Group Inc. is introducing a smaller and more affordable Bitcoin futures contract designed for retail investors.

According to an August 27 Bloomberg report , the “Bitcoin Friday Futures” contract will be priced at one-fiftyth of a Bitcoin, offering an accessible way for investors to trade crypto. Pending regulatory approval, this new product is expected to launch on September 30.

🗓️ Save the date: your new BFF is coming.

Beginning September 30,* our smallest and most accessible Bitcoin contract yet, Bitcoin Friday futures (BFF), is available at 1/50 the size of a #bitcoin .

Find out more ➡️ https://t.co/4058HbsDDu pic.twitter.com/FkXhkjfdkj

— CME Group (@CMEGroup) August 27, 2024

Bitcoin Futures Product Targeting Retail Investors

The new product’s smaller contract size will reduce the financial commitment required to enter the Bitcoin futures market. This move is part of CME’s broader strategy to attract retail investors by providing more affordable trading options.

“When you look at, say, a retail individual, active trader, they’re looking for something smaller,” said CME Group’s global head of cryptocurrency products, Giovanni Vicioso.

The contract will be available for trading every Friday, allowing frequent entry and exit points. This flexibility, combined with the lower cost, is expected to draw more participation from individuals who may have previously been priced out of Bitcoin futures .

CME Group’s Strategy of New “BFF”

CME’s introduction of these contracts would come as demand for more granular investment products grows, reflecting the increasing interest in cryptocurrency among U.S. retail investors seeking lower-risk opportunities.

“Certainly introducing that smaller-sized contract will make that contract a little bit more tradeable, more accessible for a larger swath of retail participants,” said Vicioso. “It’s going to require a smaller capital outlay to get exposure. That was one of the driving forces behind this — it was really size.”

The report hypothesized that an investor could gain exposure to one-50th of a Bitcoin—approximately $1,200 at current prices—through a “BFF” contract. Instead of paying the full amount upfront, the investor might only need to post a margin of around $300 to secure full exposure.

“When you consider a product that we’re launching that should have retail appeal, I personally love that BFF moniker,“ said Vicioso.

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