In early May, the Chicago-based derivatives market CME unveiled its Micro Bitcoin futures product, which allows investors to take smaller positions.
The CME Group’s newly released Bitcoin (BTC) micro contract saw a significant jump during the first two months of trading, signaling that institutional exposure to cryptocurrencies via derivatives continued to grow in the second quarter.
Since its launch on May 3, CME’s Micro Bitcoin futures contract has seen over 1 million contracts traded, according to the Chicago-based derivatives exchange.
Tim McCourt, a CME official, said the new product has been well received by institutions and day traders hoping to hedge their Bitcoin price risk in the short term.
The micro contract is one-tenth the size of a Bitcoin and is denominated in BTC. CME’s major Bitcoin futures contract unit is 5 BTC, in comparison.
“We’ve seen more institutional volume than we anticipated, which shows that the timing was right for a smaller bitcoin contract,” said Brooks Dudley, ED&F Man Capital Markets’ global head of digital assets.
According to CoinShares data, institutions have slashed their long-term exposure to Bitcoin and other cryptocurrencies during the recent correction, with withdrawals totaling $79 million last week.
Long-term holders who are optimistic in the long-term prospects of their investment are scooping up newly liquidated coins in the instance of BTC.
The increased activity in the futures market indicates that traders are hedging their positions, betting on Bitcoin’s short-term directional movement, or both.
While futures trading has boosted institutional Bitcoin exposure, it has also become a cause of worry for spot holders.
According to Cointelegraph, the $6 billion in BTC and ETH expiries on Friday caused significant market turbulence, with some traders predicting extreme volatility.
Last week, the Bitcoin price largely fluctuated between $30,000 and $35,000. Cointelegraph is the source of this information.
The BTC price fell 13.6 percent peak-to-trough on June 24-26, indicating high volatility in the second half of the week.
