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The Chicago Mercantile Exchange (CME) Group announced on March 28, 2022, that it would offer options on the micro futures contracts of the two largest cryptocurrencies by market capitalization: Bitcoin (BTCUSD) and Ether (ETHUSD). Each micro futures contract will be worth 1/10 the price of the underlying token. Trading of micro Bitcoin and Ether futures options will be available 24/7 on the CME platform.
Key Takeaways
- On March 28, 2022, CME Group announced that it would offer micro options on Bitcoin and Ether futures contracts.
- The new products provide more affordable options for investors looking to gain exposure to Bitcoin and Ether derivative products.
- Each contract is worth 1/10 of the underlying price of each token.
Prices of both coins rose on the news. Bitcoin is up more than 6% over the past 24 hours, and Ether is up more than 2% during the same time period.
CME’s offering will provide retail and institutional investors more flexibility to participate in the cryptocurrency market with less upfront cost. Previously, the only cryptocurrency products offered by CME were options of regular-sized bitcoin and ether future contracts.
CME launched two new reference rates for bitcoin and ether along with the new micro products. These reference rates, which provide a daily benchmark price for each token in U.S. dollars, will be published at 4 p.m. London time.
Investors will not need a digital wallet to trade CME’s new cryptocurrency products. As with other CME options, investors looking to trade micro Bitcoin and Ether options must open an account with a registered futures broker.
Growing Infrastructure for the Cryptocurrency Investor
CME’s micro Bitcoin and Ether options are the latest investment products to be launched tied to a cryptocurrency. Last year, trading began on the ProShares Bitcoin Strategy ETF (BITO), the first ETF linked to Bitcoin. A number of similar Bitcoin ETFs launched shortly afterward.
Many hopeful cryptocurrency investors are still waiting for the SEC to approve an ETF that is directly tied to the price of Bitcoin, unlike the current products which track the future price of the coin.