Bitcoin derivatives add a new force! CME will launch mini bitcoin futures

The US financial market will add a bitcoin derivative, which comes from the Chicago Mercantile Exchange (CME), the world’s largest futures and options exchange.

CME announced on Tuesday, 30th Eastern Time, that it plans to officially launch a futures product called Micro Bitcoin on May 3 this year. It will be launched soon after regulatory approval. The value of each futures contract will be only 0.1 Bitcoin, which is significantly lower than CME’s standard Bitcoin futures of 5 Bitcoins, and will also be settled in cash.

CME said that the mini bitcoin futures contract will provide a new way with high efficiency and high cost utilization for investors to adjust the risk exposure of bitcoin and improve trading strategies.

Since the launch of Bitcoin futures in December 2017, CME has also launched Bitcoin options and futures of the world’s second largest cryptocurrency Ethereum in recent years. Since the beginning of this year, CME’s Bitcoin futures contracts have traded an average of 13,800 units per day, which is equivalent to approximately 69,000 bitcoins per day. Since CME’s Ethereum futures contract was launched in February this year, an average of 767 contracts have been traded per day, which is equivalent to 38,400 Ethereum transactions per day.

Tim McCourt, CME’s global head of stock index and alternative investment products, said that since the launch of Bitcoin futures in 2017, we have found that the liquidity and participants of the cryptocurrency derivatives market have steadily increased, especially institutional traders. The advent of mini bitcoin futures directly responds to the needs of a large number of customers for small-scale contracts, and will provide market traders with more choices and higher investment precision.

CME’s launch of new Bitcoin derivatives coincides with the soaring currency price this year, and retail investors and institutions are accelerating the influx of the cryptocurrency market.

With the blessing of institutional investors, Bitcoin has doubled tenfold last year, and it has soared by 170% in the fourth quarter alone. Earlier this month, Bitcoin broke the $60,000 mark for the first time in its history. The market price has doubled in less than three months this year, which is 13 times higher than the low in March last year.

Soon after Bitcoin hit a record high, Wall Street articles mentioned that many analysts have predicted that Bitcoin will usher in a new round of strong rise. With the implementation of the new round of epidemic relief bills in the United States, Americans who receive checks may join the stock market, and of course they may also participate in the Bitcoin market.

About two weeks ago, Morgan Stanley announced that it would launch a Bitcoin investment fund to customers, becoming the first major U.S. bank to provide customers with Bitcoin funds.

This week, Wall Street news also mentioned that Fidelity Investments, with an asset management scale of US$4.9 trillion, is preparing to launch the first Bitcoin ETF in the United States. The S-1 preliminary registration statement of the ETF was uploaded to the US Securities Regulatory Commission (SEC) website this Wednesday. It will track Bitcoin’s performance through the Fidelity Bitcoin Index, which combines Bitcoin quotes from multiple mainstream cryptocurrency exchanges.