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CME Group Sets a New Benchmark with Over 30,000 Bitcoin Friday Futures Contracts

Bitcoin

On Tuesday, the CME Group, a leading global derivatives exchange, announced that its Bitcoin Friday Futures (BFF) have officially been launched and are now available for trading. 

This launch is considered CME Group’s most triumphant introduction of a cryptocurrency product, with a remarkable 31,498 contracts traded across two contract weeks, starting with its first trade this past Sunday.

Introduction to Bitcoin Friday Futures

Giovanni Vicioso, the Global Head of Cryptocurrency Products at CME Group, commented on the appeal of the smaller contract sizes and the weekly Friday expiration, stating that these features provide a more approachable way for investors to participate in the Bitcoin market while mitigating their risk in a regulated setting:

We are excited by the strong interest and support from our customers for these contracts, both in screen trading and the block market. The reduced size and weekly expiry will guide investors in navigating the Bitcoin market more effectively, all within a regulated platform.

This launch is important for reasons beyond its impressive trading volume. As per Harry Benchimol, Co-Head of Derivatives Engine at Marex, the introduction of Bitcoin Friday futures represents a significant step towards fostering broader crypto adoption in a regulated context. 

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Benchimol also pointed out that these weekly contracts are closely aligned with the spot price of Bitcoin, offering “efficient hedging opportunities and a cost-effective means” for investors to engage with the leading cryptocurrency.

The Impact on the Crypto Derivatives Market

Michael Harvey, Head of Franchise Trading at Galaxy, shared similar views, emphasizing that this launch marks a considerable development in the crypto derivatives sector. 

He mentioned that the adaptability and efficiency of these contracts serve as essential resources for traders looking to enhance their trading approaches and improve market liquidity, stating:

These weekly contracts align closely with spot prices and serve as a useful tool for increasing liquidity and refining trading strategies for all traders. As we strive to connect traditional finance with the realm of digital assets, initiatives like this demonstrate our dedication to providing clients with optimal solutions for managing their Bitcoin exposure transparently.

The Bitcoin Friday futures are designed for one-fifth of a Bitcoin and are cash-settled based on the CME CF Bitcoin Reference Rate New York Variant (BRRNY) at 4:00 PM New York time every Friday. 

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A new BFF contract will be listed each Thursday at 6:00 PM New York time, allowing traders to access the next two Fridays for trading at any moment.

Currently, Bitcoin (BTC) is priced at $62,100, reflecting a 2.3% decrease over the last 24 hours. 

Image sourced from DALL-E, chart provided by TradingView.com

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