The new financial derivatives product «Bitcoin Friday Futures» (BFF) of the «Chicago Mercantile Exchange» (CME), debuted with a record trading volume on its first day, with more than 31,498 contracts traded.
According to the announcement published this Tuesday, the launch carried out on September 29, was the “most successful launch of Cryptocurrency futures in history”, with the first trading block executed by the financial firms “Galaxy” and “Marex”.
“We are pleased to see such early customer interest and support for these new contracts, both on-screen and through the block market.” Said Giovanni Vicioso, the global head of cryptocurrencies at the CME Group.
It should be noted that the CME “BFF” is one-fiftieth of a Bitcoin (BTC) in size, and is settled in cash at the CME CF Bitcoin reference rate, at 4:00 p.m. m New York time, every Friday. Additionally, BFF contracts are traded every Thursday at the close of Wall Street markets.
Additionally, the weekly expiration allows market participants to hedge or speculate on short-term Bitcoin price movements. This, without the need to hold futures contracts for longer periods.
Daily volume of the CME Group “Bitcoin Friday Futures” (BFF). Source: CME Group
“These weekly contracts closely track spot prices, providing a valuable tool to increase liquidity and optimize trading strategies for traders of all types and sizes.” Said Michael Harvey, the head of franchise operations at “Galaxy.”
The recent push towards institutional adoption is fundamental to the maturity and stability of the crypto ecosystem, and the CME is positioned as a key catalyst in this process.
CME Group expands its Bitcoin derivatives offering
Likewise, Michael Harvey noted that the flexibility and efficiency of these new contracts provide “valuable tools for traders” who seek to optimize their trading strategies and at the same time improve market liquidity.
“As we continue to bridge the gap between traditional finance and the digital asset space, initiatives like this reinforce our commitment to providing clients with the best solutions to manage their Bitcoin exposure in a transparent market.” Harvey said.
Notably, the CME Group announced the development of the BFF derivative in August, in response to the growing demand for BTC derivatives and the activities of its rivals. Currently, “Coinbase Derivatives” has futures contracts for BTC, Ethereum and other cryptocurrencies in operation.
“The launch of CME Group’s Bitcoin Friday futures contracts is a significant step towards the adoption of cryptocurrencies within a regulated framework. “These weekly contracts offer an efficient hedge by closely tracking the spot price and provide profitable exposure to Bitcoin.” Said Harry Benchimol, co-director of “Derivatives Engine” at Marex.
Currently, Bitcoin is trading at $61,523 dollars, accumulating monthly gains of 7.28%, according to data from CoinMarketCap.
Additionally, the CME also offers several cryptocurrency derivative products in addition to the BFF. For reference, in 2017, the CME launched its Bitcoin futures contract, which represents 5 BTC and is aimed at institutional traders.
“The smaller size of these contracts, coupled with a weekly expiration on Fridays, will provide investors with not only a more accessible way to access the Bitcoin market, but will also allow them to more effectively manage their Bitcoin exposure, all in a regulated stock market. Indicated Giovanni Vicioso of the CME Group.
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