• 17 July, 2024

CME Adds Event Contracts on Bitcoin Futures to Meet Crypto Demand

The world’s largest derivatives exchange, CME Group, has announced that Bitcoin futures will be added to its suite of event contracts on March 13. These new contracts aim to provide a less opaque and more straightforward entry point for investors into the cryptocurrency markets, pending regulatory approval.

These new contracts offer a unique approach for investors to speculate on Bitcoin’s volatility by mirroring the daily price changes of the benchmark Bitcoin futures. Participants can know their potential gain or loss before entering into a contract using these options, which can be valued up to $20 per contract.

“Our new event contracts on Bitcoin futures provide a highly transparent and fully regulated platform for investors,” said Tim McCourt, Global head of equity and FX products at CME Group.

CME chairman and CEO Terrence A. Duffy had previously stated that the firm had seen an increase in demand for its cryptocurrency products since November.

During a recent appearance on CNBC’s Closing Bell, Duffy made the revelation in response to a question about the level of institutional interest in its Bitcoin futures offering. After Terra’s collapse in May, FTX’s insolvency in November, and a spate of bankruptcies in a contagion, many critics expected institutional interest in crypto assets to decline.  

Contrary to this belief, Duffy disclosed that demand for CME’s crypto derivatives products had increased significantly since November.

“It’s really been interesting what’s going on with Bitcoin after we saw what happened at the end of last year with some of the issues going on in the industry. The whole industry of crypto kinda suffered and then we saw an uptick starting in our trades around November, December and it is continuing on here,” the CEO said.

CME debuted its Bitcoin futures product in December 2017, after the bull market ended. Later, in February 2021, the Chicago trading giant took another step forward in the cryptocurrency derivatives market by introducing trading in Ethereum futures.

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