Massive Bitcoin Expansion: CME Debuts ‘Friday Futures,’ Nasdaq Pursues BTC Index Options

In a move to broaden access to Bitcoin (BTC) futures for retail investors, CME Group has unveiled a new, smaller-sized futures contract dubbed the “Bitcoin Friday Futures” (BFF).

According to Bloomberg, the cash-settled BFF will be priced at one-50th the size of a full BTC, currently around $1,200 per contract. This is significantly more affordable than CME’s existing Bitcoin futures, priced at the full Bitcoin value.

Giovanni Vicioso, CME Group’s global head of cryptocurrency products, explained the rationale behind the venture, highlighting the growing demand for scaled-down investment instruments among retail traders. 

Vicioso highlighted the success of CME’s existing micro BTC and Ethereum futures, noting a surge in retail engagement, with volumes for micro-Bitcoin futures witnessing a 200% uptick this year compared to 2023.

Acknowledging the landscape of retail investment preferences, Vicioso elaborated on the significance of the new BTC Friday futures in facilitating “greater accessibility and affordability for retail participants.” 

CME calls the new contracts “BFF,” which stands for Bitcoin Friday Futures but also playfully references the common “best friend forever” acronym. 

Vicioso said the friendly moniker was intentional, noting, “when you consider a product that we’re launching that should have retail appeal, I love that BFF moniker.” The new BFF contracts are pending regulatory review, but are expected to launch on September 30th.

Similarly, the Nasdaq seeks regulatory approval to launch options contracts tied to a Bitcoin index with the US Securities and Exchange Commission (SEC).

Reuters reported on Tuesday that the exchange operator has filed with the US SEC 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 proposed Nasdaq BTC Index Options would provide investors with a new way to gain exposure to and hedge price movements, complementing the suite of Bitcoin-based exchange-traded funds (ETFs) and futures products that have hit the market in recent months.

The Nasdaq filing comes because the SEC has not approved options tied to any newly launched spot Bitcoin ETFs, including BlackRock’s iShares BTC Trust ETF. 

Exchanges initially applied for exchange-traded fund options shortly after the underlying funds debuted in January but have since withdrawn and refiled those applications based on “SEC feedback.”

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.

When writing, the largest cryptocurrency on the market has fallen back to the $61,600 after hitting a one-month high of $65,000 on Sunday, recording a 3% drop in the 24-hour time frame. 

Featured image from DALL-E, chart from TradingView.com