CME Introduces Bitcoin ‘Friday Futures’ Contract to Attract Retail Investors
CME Group Inc. is set to introduce a new Bitcoin futures contract tailored for retail investors seeking more accessible crypto options. The upcoming weekly futures contracts, known as Bitcoin Friday futures, will be valued at one-50th the size of a single Bitcoin, offering a more cost-effective entry point for investors compared to the current offerings. These cash-settled contracts are scheduled to launch on September 30, pending regulatory approval, as reported by the Chicago-based company, with Bitcoin currently trading at approximately $62,500.
Giovanni Vicioso, the global head of cryptocurrency products at CME Group, highlighted the demand for smaller investment options among retail individuals and active traders. CME Group already provides futures contracts for Bitcoin and Ether, along with “micro” versions of each coin introduced in 2021. Notably, the trading volumes for CME’s micro-Bitcoin futures have surged by about 200% this year compared to the levels in 2023, indicating a growing retail interest, according to Vicioso.
Despite the availability of micro Bitcoin contracts, the soaring price of Bitcoin has made even these smaller options unattainable for some investors seeking more affordable avenues for investment. Bitcoin witnessed a 157% surge last year, partly driven by the anticipation surrounding the launch of exchange-traded funds directly tied to the cryptocurrency. These funds, which debuted in January, have experienced robust trading activity, attracting approximately $18 billion in net inflows, as data compiled by Bloomberg reveals. In 2024, Bitcoin has further appreciated by 50%.
Vicioso emphasized that introducing a smaller-sized contract aims to enhance tradeability and accessibility for a broader spectrum of retail participants by necessitating a reduced capital outlay for exposure. The new BFF (Bitcoin Friday futures) contract, equivalent to around $1,200 for one-50th of a Bitcoin, enables investors to post approximately $300 in margin for full exposure without the need for an upfront payment.
The BFF contracts will be listed every Thursday night New York-time for Friday trading, allowing investors to trade the nearest two Fridays at any given time. This Friday expiry structure is designed to closely track Bitcoin’s spot price, given that cryptocurrencies are traded continuously, 24/7. Vicioso expressed enthusiasm for the retail-friendly appeal of the BFF contracts, noting the symbolic significance of the “best friend forever” moniker.
The move by CME Group to introduce smaller Bitcoin futures contracts underscores the evolving landscape of cryptocurrency investment, catering to the diverse needs of retail investors seeking accessible and affordable entry points into the crypto market.
