Bitcoin Sees Major Growth as CME Launches ‘Friday Futures’ and Nasdaq Explores BTC Index Options
CME Group has introduced a new derivative product, the “Bitcoin Friday Futures” (BFF), aimed at making Bitcoin (BTC) futures more accessible to retail investors. The BFF is a cash-settled contract priced at one-50th the value of a full Bitcoin, making it more cost-effective for retail traders compared to CME’s existing Bitcoin futures.
The global head of cryptocurrency products at CME Group, Giovanni Vicioso, highlighted the rising demand for smaller investment instruments among retail traders. He pointed out the success of CME’s micro BTC and Ethereum futures, with retail engagement increasing significantly. Volumes for micro-Bitcoin futures have surged by 200% this year compared to the previous year.
The new BTC Friday futures, known as “BFF,” not only stands for Bitcoin Friday Futures but also playfully references the “best friend forever” acronym, emphasizing its appeal to retail investors. Vicioso emphasized the importance of these contracts in providing greater accessibility and affordability to retail participants. The BFF contracts are awaiting regulatory approval and are scheduled for launch on September 30th.
In a similar move, Nasdaq is seeking approval from the US Securities and Exchange Commission (SEC) to introduce options contracts linked to a Bitcoin index. The options would be based on the CME CF Bitcoin Real-Time Index, developed by CF Benchmarks to track BTC futures and options available on the CME Group exchange.
The proposed Nasdaq BTC Index Options would offer investors a new avenue to gain exposure to and hedge against price movements in Bitcoin, complementing the array of Bitcoin-based exchange-traded funds (ETFs) and futures products already in the market. The filing comes as the SEC has not approved options tied to newly launched spot Bitcoin ETFs, including BlackRock’s iShares BTC Trust ETF.
While exchanges initially applied for ETF options following the debut of underlying funds in January, they have since withdrawn and refiled those applications based on SEC feedback. Traders have turned to alternative BTC-linked products like leveraged ETFs for options exposure. However, industry experts believe that having options on a BTC index could be a valuable addition to the crypto derivatives market.
At the time of writing, Bitcoin’s price has retraced to $61,600 after reaching a one-month high of $65,000, marking a 3% decline in the 24-hour period. This development in the derivatives market reflects the ongoing evolution and maturation of the cryptocurrency space.
