The Chicago Mercantile Exchange (CME) Group’s Bitcoin Friday Futures (BFF) debuted with a record first-day trading volume among crypto futures offerings, with over 31,498 contracts traded across two contract weeks.
According to an Oct. 1 announcement, the Sept. 29 launch was the “most successful crypto futures launch ever,” with the first trade block executed by financial firms Galaxy and Marex.
The new derivatives product is sized at one-50th of a Bitcoin (BTC) and cash-settled every Friday against the CME CF Bitcoin Reference Rate New York Variant (BRRNY), a benchmark for BTC’s spot price.
BFF contracts are listed every Thursday at the close of Wall Street markets. The weekly expiry allows market participants to hedge or speculate on Bitcoin price movements in the short term without the need to hold futures contracts for longer durations.
BFF Daily Volume. Source: CME Group
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“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,” Michael Harvey, head of franchise trading at Galaxy, said in a statement.
Trading desks use futures contracts primarily for hedging and speculation, either to protect against price volatility or to bet on the future price of assets.
The CME Group announced the bite-sized Bitcoin product in August in response to the growing demand for BTC derivatives and rivals’ activities. Coinbase Derivatives, for instance, has futures contracts for BTC, Ether (ETH) and other cryptocurrencies.
The CME offers several crypto-derivative products beyond BFF. In 2017, it launched its Bitcoin futures contract, representing 5 BTC and targeting institutional traders. The company offers other futures and options contracts for BTC and ETH.
“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,” said Giovanni Vicioso, global head of cryptocurrency products at CME Group.
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