CME Group To Offer Retail Traders New Way To Bet on BTC Direction

CME Group is set to expand its event contracts to include bitcoin futures next month as the derivatives marketplace continues its crypto push.

The product launch, which is pending regulatory review, is set for March 13, the company revealed Tuesday. 

CME Group currently offers event contracts — $20-increment, daily expiring products — on a handful of its benchmark futures markets, including gold, silver, copper, and E-mini S&P 500.

Since CME launched event contracts last September, nearly 330,000 of these contracts have been traded, with 43% coming from E-mini S&P 500 futures. Retail accounts trading these CME event contracts total 1,300. 

Such contracts allow investors to make bets — costing between $0.25 and $19.75 — on an asset’s predicted closing price. This value will vary throughout the trading day as the likelihood of the product closing above the predicted price changes with market movements. 

An investor is credited $20 if their prediction is correct, and $0 if their prediction is incorrect.

“These contracts, which track the daily price moves of our deeply liquid benchmark bitcoin futures, offer an innovative, lower-cost way for investors to trade their views on the up or down price moves of bitcoin,” Tim McCourt, CME Group’s head of equity and foreign exchange products, said in a statement.

Event contracts are intended to appeal to “a broad audience of retail investors and market enthusiasts,” a spokesperson told Blockworks, adding that 53% of event contract traders were new to CME Group products, as of the end of 2022.

CME Group began offering bitcoin futures in 2017 and went on to add ether futures in February 2021. The company later launched cash-settled micro bitcoin futures contracts and moved in November 2021 to add micro ether futures, announced just a week prior to ether’s all-time high of nearly $4,900.

The marketplace’s crypto futures and options hit an average daily volume of roughly 53,000 contracts in 2022 — up 13% year over year, according to a CME spokesperson. The average daily volume for the company’s bitcoin futures last year reached 10,700 contracts, an increase of 7% from 2021. 

CME Group bitcoin futures average daily volume was 9,900 contracts in January, up 33% from December.

The company’s latest product plans come a couple of weeks after CME Group launched non-tradable reference rates and real-time indices — calculated and published daily by CF Benchmarks — for three metaverse tokens: axie infinity (AXS), chiliz (CHZ) and decentraland (MANA).

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