CME to launch bite-sized Bitcoin ‘Friday’ futures in bid for retail

CME Launches Bite-Sized Bitcoin Friday Futures for Retail Investors

The Chicago Mercantile Exchange (CME) Group, a leading US futures exchange, is introducing Bitcoin Friday Futures (BFFs), targeting retail investors seeking exposure to cryptocurrency futures. Announced on August 27, BFFs will be launched on September 30.

These contracts will be sized at only one-fiftieth of a Bitcoin (BTC), significantly smaller than comparable products from competitors like Coinbase. BFFs will be cash-settled every Friday against the CME CF Bitcoin Reference Rate New York Variant (BRRNY).

"With these smaller-sized contracts, investors can fine-tune their Bitcoin exposure on a regulated exchange," said Giovanni Vicioso, CME Group's global head of cryptocurrency products.

Surging Popularity of BTC Futures

Bitcoin futures have witnessed a surge in popularity in the US, with open interest approaching 30,000 contracts as of August 20. CME faces competition from Coinbase Derivatives, which offers futures contracts for various cryptocurrencies.

Role of Futures Contracts

Futures contracts allow buyers and sellers to agree on a future price for an underlying asset. They provide hedging opportunities for institutional investors and are popular for speculative trading due to their leverage capabilities.

Benefits of BFFs

Tanmay Sheth, director of futures at retail platform Webull, emphasized the cost-efficiency and versatility of BFFs. "They will provide a cost-efficient way to gain exposure to Bitcoin and may inspire new trading strategies."

Expansion of Crypto Derivatives

Additionally, the launch of other cryptocurrency derivatives, such as options, is anticipated on US exchanges in the near future.