With the success of Bitcoin and many other cryptocurrencies, investors are looking for a way to gain exposure. The notional value of BTC has increased dramatically since the BTC futures contract launch date, causing the price of the contract to be too high for many investors. The CME saw success in the first Bitcoin futures launch, so they decided to create the smaller Micro Bitcoin contract— 1/10 of 1 BTC— so that more traders can have exposure to the market. This contract is set to be released May 3rd.
The Micro Bitcoin contract will be based on the CME CF Bitcoin Reference Rate (BRR). The BRR pools all trading activity for all major spot exchanges during the hours of 3 p.m. - 4 p.m. London time (BST). With the CME launching this product, investors can gain access to an instrument regulated by the CFTC.
Given all of the uncertainties in the markets and volatility over the past year due to the pandemic, traders should look to diversify and have a well-rounded portfolio. Cryptocurrencies are here to stay and will continue to grow and get used in more areas of the world, so why not add a piece to your strategy? This Micro contract gives all traders an opportunity to add one of the most intriguing investments currently out there to their portfolio.
Please feel free to reach out to discuss adding the Micro Bitcoin futures to your trading portfolio.