As a seasoned researcher with years of experience delving into the complexities of financial markets and emerging technologies, I find the recent announcement by CME Group to launch Bitcoin Friday Futures (BFF) an intriguing development.
Starting from September 30 (pending regulatory approval), CME Group intends to debut Bitcoin Friday Futures (BFF). Each of these new weekly contracts will be equivalent to 1/50 of one bitcoin and will settle in cash using the CME CF Bitcoin Reference Rate New York Variant (BRRNY) every Friday at 4:00 PM New York time. The purpose behind BFF is to provide a means for investors to control their Bitcoin exposure, especially when considering weekend price fluctuations.
Every week, a fresh BFF agreement will be posted for trading on Thursdays, becoming available the next day (Friday). Traders can transact using contracts for the upcoming two Fridays. These contracts are designed to cater to various market participants, such as institutional investors and active individual traders, enabling them to adjust their bitcoin investments within a structured, regulatory environment.
As per Giovanni Vicioso, the Global Head of Cryptocurrency Products at CME Group, these contracts are structured to aid traders in effectively handling their Bitcoin investments. These contracts will be settled against the BRRNY, a benchmark often utilized by spot bitcoin ETFs, providing a well-known point of reference for market participants.
1. The announcement has received positive feedback from different sectors in the industry. Steve Sanders, Vice President of Marketing and Product Development at Interactive Brokers, stated that these BFF contracts offer an affordable approach for handling bitcoin investments. Elad Even-Chen, Chief Financial Officer of Plus500, added that these contracts would attract a diverse range of investors due to their unique ability to manage cryptocurrency holdings in a new manner.
The upcoming Bitcoin futures contracts will be added to CME Group’s current Bitcoin futures lineup, which experienced remarkable trading activity in the year 2024. On a typical day, the number of Bitcoin futures contracts traded has surpassed 14,554, with an open interest of 27,900 contracts. Additionally, Micro Bitcoin futures have demonstrated robust performance, averaging 37,000 contracts per day and boasting an open interest of 28,000 contracts.
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2024-08-27 20:49