The Chicago Mercantile Exchange (CME) has unveiled plans to launch a new Bitcoin Derivative (BTC) product that will allow traders to speculate on fractions of the major digital currency.
The CME Group’s Micro Bitcoin contract, which will be launched on May 3 pending regulatory approval, will be priced at 0.1 BTC. The smaller contract size gives market participants an extra tool to hedge bitcoin price risk, CME reported on Tuesday. The current CME bitcoin contract unit is 5 BTC.
Tim McCourt, CME Group’s global leader in stock indices and alternative investment products, explains:
“The introduction of micro-bitcoin futures contracts directly responds to the demand for smaller contracts from a wide range of customers and will provide greater choice and accuracy in how participants trade Bitcoin futures contracts in a transparent and efficient manner within the CME group.”
The Chicago Mercantile Exchange launched Bitcoin futures in December 2017. The Chicago Board Options Exchange, the largest competitor in various cities, was the first to introduce derivative contracts in the same month, but has since completely abandoned the Bitcoin futures contracts.
The Chicago Mercantile Exchange has seen steady growth in cryptocurrency derivatives trading since the launch of its first Bitcoin futures contract in more than three years. As Cointelegraph previously reported, the average daily volume of Bitcoin CME futures jumped 57% in January. Interest is likely to increase as the bullish Bitcoin market attracts new investors.
There is also evidence that the broader market for cryptocurrency derivatives is gaining momentum. According to CoinMarketCap, the value of derivative cryptocurrency transactions in December 2020 reached more than $ 1.3 trillion, accounting for 55% of the total market.