In an effort to expand access to Bitcoin (BTC) futures contracts for retail investors, CME Group has unveiled a new, smaller futures contract dubbed “Bitcoin Friday Futures” (BFF).
According to Bloomberg, the cash-settled BFF will be priced at one-fiftieth the value of a full BTC, or about $1,200 per contract. That’s significantly cheaper than CME’s existing Bitcoin futures contracts, which are priced at the full value of Bitcoin.
CME Unveils Smaller ‘BFF’ Contracts
Giovanni Vicioso, CME Group’s Global Head of Cryptocurrency Products, explain the company’s rationale, highlighting the growing demand for small-sized investment instruments among retail traders.
Vicioso highlighted the success of CME’s existing micro BTC and Ethereum Futures Contractsnoting an increase in retail engagement, with micro-Bitcoin futures volumes seeing a 200% increase this year compared to 2023.
Acknowledging the landscape of retail investment preferences, Vicioso explained the importance of the new Friday BTC futures contracts in facilitating “greater accessibility and affordability for retail participants.”
The CME is calling the new contracts “BFF,” which stands for Bitcoin Friday Futures, but also playfully refers to the common acronym “best friend forever.”
Vicioso said the friendly nickname was intentional, noting, “When you consider a product that we’re launching that should have retail appeal, I love that BFF moniker.” New BFF deals are pending regulatory reviewbut their launch is scheduled for September 30.
Similarly, Nasdaq is seeking regulatory approval to launch options contracts linked to a Bitcoin index from the U.S. Securities and Exchange Commission (SEC).
Nasdaq Considers Introducing Options on Bitcoin Index
Reuters reported On Tuesday, the exchange operator filed with the U.S. SEC an application to offer options 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 Nasdaq Project BTC Index Options would offer investors a new way to gain exposure and protection from price movements, complementing the range of Bitcoin-based exchange-traded funds (ETFs) and futures products that have emerged on the market in recent months.
The Nasdaq filing comes as the SEC has not approved options tied to newly launched Bitcoin cash ETFs, including BlackRock’s iShares BTC Trust ETF.
Exchanges initially called for exchange-traded fund options shortly after underlying funds debuted in January, but have since withdrawn and refiled those applications based on “SEC comments.”
Meanwhile, Reuters reports that traders have turned to alternative BTC-linked products, such as leveraged ETFs, to get the options exposure they want. However, Matt Hougan, CIO at asset manager and ETF issuer Bitwise, believes that having options on a BTC index could be a valuable addition to the crypto derivatives market.
At the time of writing, the market’s largest cryptocurrency has fallen back to $61,600 after hitting a one-month high of $65,000 on Sunday, registering a 3% drop over a 24-hour period.
Featured image of DALL-E, chart from TradingView.com
