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CME Group launches Micro Bitcoin futures targeting institutions

CME Group launches Micro Bitcoin futures targeting institutions
Jordan Major

CME Group has expanded its cryptocurrency derivatives offering after launching the Micro Bitcoin futures product. 

In a press statement, CME said the new product has emerged from a consistent growth of liquidity and participation in the current futures options. The settlement of the futures is cash-based on the CME CF Bitcoin Reference Rate.

With the product, CME seeks to address the challenge of the high cost of investing in cryptocurrencies and provide a regulated environment to participate in the digital assets sector.  

CME notes that the Bitcoin Micro futures contract is one-tenth the size of one bitcoin targeting institutions and active traders.

“At one-tenth, the size of one bitcoin, Micro Bitcoin futures will provide an efficient, cost-effective way for a broad array of market participants. From institutions to sophisticated, active traders to fine-tune their bitcoin exposure and enhance their trading strategies, all while retaining the benefits of CME Group’s standard Bitcoin futures,” said Tim McCourt, CME Group Global Head of Equity Index.

Furthermore, the product has already received backing from futures brokerage firm Trade Station, E*TRADE Financial, and Genesis Trading. 

CME executive calls for more bitcoin studies

CME Group is now part of traditional finance players with active involvement in bitcoin. The asset has surged to new levels sustaining the current rally culminating in a $64,800 record price on April 14.

Last year, CME Group Chief Economist Blu Putnam, in a now-deleted video, termed bitcoin as an exciting concept that needs further studying and experience. 

Putnam said there was need for balance before bitcoin becomes a reliable portfolio diversifier.

The March 2020 video emerged when bitcoin was experiencing price corrections and trading below the $10,000 mark. Currently, the asset is trading at $58,075 after witnessing an influx of institutions. 

Following the video’s deletion, analysts allege it was a way for CME to protect their traditional finance investors. Back then, the traditional crypto market was crumbling amid the coronavirus pandemic.

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