CME Group’s Bitcoin Friday futures (BFF), which went live on Sunday, September 29 and its first trade was executed by Galaxy and Marex, has been deemed a huge success.
The derivatives marketplace announced that already 31,498 contracts have been traded across two different contract weeks.
Bitcoin Friday futures are sized at one-fiftieth of one bitcoin and cash-settled to the CME CF Bitcoin Reference Rate New York Variant (BRRNY) at 4:00 p.m. New York time every Friday.
A new BFF contract is listed every Thursday at 6:00 p.m. New York time for a Friday trade date, with market participants able to trade the nearest two Fridays at any given point.
“Bitcoin Friday futures have become our most successful crypto futures launch ever”
Giovanni Vicioso, Global Head of Cryptocurrency Products at CME Group, said: “With more than 31,000 contracts traded on day one, Bitcoin Friday futures have become our most successful crypto futures launch ever. We are pleased to see such early customer interest and support for these new contracts, both on screen and through the block market. The smaller size of these contracts, along with a weekly Friday expiry, 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 on a regulated exchange.”
Harry Benchimol, Co-Head of Derivatives Engine at Marex, commented: “The launch of CME Group’s Bitcoin Friday futures is a significant step toward crypto adoption within a regulated framework. These weekly contracts offer efficient hedging by closely tracking the spot price and provide a cost-effective exposure to bitcoin. By introducing a product closer to the very popular perpetuals on crypto platforms, CME Group is closing the gap between traditional financial and crypto markets. Marex is proud to have executed the first block trade, reinforcing our commitment to improving liquidity and driving innovation in the crypto market.”
Michael Harvey, Head of Franchise Trading at Galaxy, said: “The launch of Bitcoin Friday futures by CME Group represents a significant advancement in the broadening of crypto derivatives markets, offering investors a flexible and efficient way to manage their bitcoin exposure. These weekly contracts closely track spot prices, providing a valuable tool for growing liquidity and optimizing trading strategies for traders of all types and sizes. As we continue to bridge the gap between traditional finance and the digital asset space, initiatives like this reinforce our commitment to empowering clients with the best solutions to manage their bitcoin exposure in a transparent market.”
Bitcoin Friday futures (BFF) are worth 1/50 of a Bitcoin
When CME first introduced its plans to launch the CFF contract, several leading brokers welcomed the product, including Interactive Brokers, Plus500, and Webull.
BFF are weekly futures contracts that are to be cash-settled to the CME CF Bitcoin Reference Rate New York Variant (BRRNY) at 4:00 p.m. New York time every Friday.
A new BFF contract will be listed every Thursday at 6:00 p.m. New York time for a Friday trade date, with market participants able to trade the nearest two Fridays at any given point. A Friday expiry allows these contracts to closely track the spot price of bitcoin, as well as help investors mitigate weekend price moves.
Sized at one-fiftieth of one bitcoin, the Bitcoin Friday futures (BFF) contract is being widely welcomed within the brokerage community, with executives from leading brokers Interactive Brokers, Plus500, and Webull commenting on its value for investors and traders.
CME Group’s suite of benchmark Bitcoin futures contracts have found high demand in 2024- Year-to-date trading highlights include:
Bitcoin futures record average daily volume (ADV) of 14,554 contracts
Bitcoin futures record open interest (OI) of 27,900 contracts
Micro Bitcoin futures record ADV of 37,000 contracts
Micro Bitcoin futures record OI of 28,000 contracts
CME plans to launch spot Bitcoin trading
According to a recent Financial Times report, CME has been in discussions with cryptocurrency traders to create a regulated marketplace for spot Bitcoin trading. The platform, known for being the largest Bitcoin futures trading platform, is expected to be operated by Swiss-based currency trading platform EBS.
Spot trading involves the buying or selling of assets at the current market price, as opposed to futures trading, which allows traders to speculate on the price movements of cryptocurrencies without actually owning them. Despite the volatility of cryptocurrency prices, spot trading is considered to carry a relatively lower level of risk since traders are only exposed to the price movements of the assets they own. However, the returns on spot trades are generally not as high as those from futures trading.
Introducing spot Bitcoin trading on CME would enable traders to engage in basis trades, a strategy profiting from the small price differences between futures contracts and the underlying spot Bitcoin.
This development follows the Securities and Exchange Commission’s approval of spot Bitcoin ETFs in January, which allowed major financial institutions such as BlackRock and Fidelity to enter the digital assets market. The move provided traders with a safer way to invest in Bitcoin, attracting over 500 institutions within the first three months and allocating over $10 billion to the funds. An additional $40 billion came from retail traders.
