CME Group Launches Micro Bitcoin Futures Trading

CME Group, one of the largest and best companies in the derivatives market announced the creation of Futures with Micro Bitcoins.

May 3, 2021 | AtoZ MarketsToday from Chicago, CME Group, one of the largest and best companies in the derivatives market announced the creation of Futures with Micro Bitcoins, demonstrating once again that cryptocurrencies gain more interest every day among investors.

Tim McCourt CME Group Global Head of Equity Index and Alternative Investment Products said: “At one-tenth, the size of one bitcoin, Micro Bitcoin futures will provide an efficient, cost-effective way for a broad array of market."

This new product brings incredible benefits to investors and it is great news for all traders since it will undoubtedly help to have lower transaction costs, and to be in a regulated environment, eliminating these two great market fears.

Likewise, by reducing the size of the contracts, new retail clients and institutional clients, will be able to provide coverage and maintain the spot positions.

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How This New Bitcoin Micro Futures work?

Micro Bitcoin futures (MBT) was created as 1/10 the size of one bitcoin. CME Micro Bitcoin futures are cash-settled, based on the CME CF Bitcoin Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. Micro Bitcoin futures are listed on and subject to the rules of CME.

Bitcoin futures are contracts that commit to buy or sell in the future a certain amount of bitcoin at a price already stipulated by the parties in advance. Futures have proven since their inception to be a powerful market tool because they offer those who use them great flexibility and the opportunity to protect their investments.

The futures have some data defined such as the quantity, price, and expiration date of the operation, and upon expiration of these, payments are made according to what is stipulated in the contract.

These contracts are a type of derivatives trading contract, so we can find these tools within regulated and unregulated markets such as OTC (Over the Counter).

Despite the fact that futures markets are centuries old, today the investors use them to obtain major profitability between the parties,  especially where external circumstances and the environment determine the variability in prices, as in the case of the cryptocurrency market.

Key Benefits of This Instrument

This type of financial asset has great advantages for those who wish to access them, either to diversify their portfolio or to operate them directly and by minimizing the risk due to the size of the contract we can optimize our profit margin.

Likewise, the transparency of being in a regulated company allows us to be calm with our investments, and we can improve the efficiency of our capital when doing crypto-trading.

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