Largest derivatives exchange launches Bitcoin
Demand has risen sharply in recent weeks and months, so CME has decided to meet its customers’ needs and launch the new Bitcoin Option financial product early next year. However, this announcement is subject to change as not all authorities have yet given their final approval.A futures contract will have a volume of 5 BTC, the value of which will be expressed in USD. The official announcement further explains this:CME options on bitcoin futures settle into 1 bitcoin futures contract upon termination of trading. CME bitcoin futures are based on the CME CF Bitcoin Reference Rate (BRR), which aggregates bitcoin trading activity across five major cryptocurrency spot exchanges between 3:00 p.m. and 4:00 p.m. London time.
So far, new financial products in the form of Bitcoin ETFs have been rejected by the Security and Exchange Commission. However, novel financial products such as Bitcoin warrants are on the rise, especially in the United States.
Tim McCourt, Head of Investment Products for the CME Group, says that Bitcoin options will meet with strong demand from institutional investors, who will be able to trade large amounts of capital and further hedge their risks with Bitcoin warrants. According to McCourt, there is a particularly strong demand for Bitcoin warrants in Asia.
Author : Collin Brown