CME Group will launch a smaller $Bitcoin (BTC.CC)$ futures contract to attract retail investors who may exit existing crypto products due to high prices. This cash-settled product, called "Bitcoin Friday futures" (BFF), will be priced at one-fiftieth of a Bitcoin per contract, meaning investors do not need to invest a large amount of money like they do with current products. CME Group has stated that this product will be listed on September 30th, pending regulatory approval.

CME Group's Global Head of Cryptocurrency Products, Giovanni Vicioso:

"Active retail traders are looking for cheaper trades."

The CME Group already offers Bitcoin and Ethereum futures, as well as "mini" versions of both, priced at one-tenth of a token. These products were launched in 2021. Meanwhile, Vicioso said that compared to 2023 levels, trading volume for CME Group's mini Bitcoin futures has increased by about 200% this year, indicating an increased interest among retail investors.

But with the rise in Bitcoin prices, even mini Bitcoin products have become out of reach for those seeking cheaper investment options.

Bitcoin rose 157% last year, partly due to optimistic expectations for a US Bitcoin ETF. These funds were launched in January of this year and have had a strong start. Data shows that these funds have received a net inflow of about $18 billion. So far this year, Bitcoin has risen another 50%.

Viciouso says:

"Of course, launching smaller contracts will make the contract more tradable, more easily accepted by retail traders." "Having exposure will require less capital outlay. That's one of the drivers behind it - size is key."

Here is the assumed cost scenario: One BFF contract brings investors a risk exposure of 1/50 bitcoin, currently equivalent to around $1,200. However, investors do not necessarily need to prepay that amount of money. Instead, they can provide a margin of around $300 to gain full exposure.

CME refers to this smaller contract as "BFF", which stands for Bitcoin Futures on Friday, but also implies "best friend forever" in colloquial language. The new BFF contract will be listed on Thursday nights in New York time, with trading on Fridays; investors will be able to trade the two most recent Friday contracts at any given time. CME stated that the contracts expiring on Fridays should be able to closely track the spot price of bitcoin. Cryptocurrencies trade around the clock, 24 hours a day, 7 days a week.

Viciouso says:

"The products we launch should be attractive to retail traders, I personally like the nickname BFF."

On Wednesday, cryptocurrencies generally fell, $Bitcoin (BTC.CC)$ Dropped nearly 6%, failing to hold the $0.06 million mark. $Ethereum (ETH.CC)$ It once fell below the $2400 integer mark, with a daily decline of more than 9%.

Edited by/Andreswang