CME Launches Bitcoin Friday Futures (BFF) Contract to Cushion the Effect of Bitcoin's Increasing Price for Retail Traders

The Chicago Mercantile Exchange (CME) has launched a mini-Bitcoin futures contract aimed at inclusiveness for retail investors. Termed the Bitcoin Friday Futures (BFF)

The Chicago Mercantile Exchange (CME) has launched a mini-Bitcoin futures contract aimed at inclusiveness for retail investors. Termed the Bitcoin Friday Futures (BFF), the contract will become available for trade on September 30, pending regulatory review and approval.

The exchange will price the new contract at a fiftieth quarter of one Bitcoin, allowing small-scale investors to stay in the market despite the asset’s growing price. Furthermore, the contracts will be listed on CME at the close of the Thursday New York market session ahead of the trading session on Friday.

The weekly contract will be a cash settlement determined by the CME CF Bitcoin Reference Rate New York Variant (BBRNY) at the close of the New York trading sessions on Friday. This is to accurately track Bitcoin’s spot price and prevent investors’ exposure to the asset’s weekend price movement.

A Market for Everyone

Notably, the CME had launched a similar product in 2021. The Bitcoin and Ethereum micro versions offered contracts to retail traders sized at one-20th of the assets.

The fund didn’t gain traction until this year when the contract’s usage surged by a staggering 200% from 2023. Despite its prowess, Bitcoin’s growing price has made the contract expensive for retail traders by the day, defeating its aim.

Bitcoin has rallied over 135% year-over-year and more than 30% since the start of 2024. The asset’s impressive performance has allowed large traders to have their way by continually outpricing retailers in the options market.

Giovanni Viciosos, CME Group’s Global Head of Cryptocurrency Products, noted that introducing a small-scale contract like the BFF will make them more attractive to retail traders. He said that size was the driving force behind the innovation, and retail traders would need little of it to trade the contract.

The market for Bitcoin has expanded substantially, with new products tied to the asset debuting regularly. The Crypto Basic earlier reported the Nasdaq’s filing to launch Bitcoin index options on August 27. A Bitcoin options application is also lying unapproved by the US Securities and Exchange Commission (SEC).

At press time, Bitcoin was trading at $61,935, with a market cap of $1.22 trillion.

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