Gairika Mitra
CME Group, the derivatives marketplace, has announced that its Bitcoin Friday futures (BFF) have launched and are available for trading.
With more than 31,000 contracts traded on day one, BFF is said to be CME’s most successful crypto futures launch ever.
“With more than 31,000 contracts traded on day one, Bitcoin Friday futures have become our most successful crypto futures launch ever,” said Giovanni Vicioso, Global Head of Cryptocurrency Products at CME Group.
The BFF launch represents a significant advancement in the broadening of crypto derivatives markets, offering investors a flexible and efficient way to manage their Bitcoin exposure. The weekly contracts closely track spot prices and provide a valuable tool for growing liquidity. It also helps optimize trading strategies for traders of all types and sizes, as per Vicioso.
Bitcoin Friday futures are sized at one-fiftieth of one Bitcoin. Each contract is cash-settled to the CME CF Bitcoin Reference Rate New York Variant (BRRNY) at 4:00 p.m. New York time every Friday.
Every new BFF contract is listed every Thursday at 6:00 p.m. NY time for a Friday trade date, allowing market participants to trade the nearest two Fridays at any given point. To be exact, 31,498 contracts traded on day one.
The first trade of BFF contracts happened on Sunday, September 29, with Galaxy and Marex executing a block trade. Marex’s Harry Benchimol, Co-Head of Derivatives Engine at Marex, said that the launch of Bitcoin Friday futures 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,” said Benchimol.
What are Bitcoin Friday Futures (BFF)?
Bitcoin Friday futures are weekly contracts settled in USD. These provide a precise method for gaining exposure to Bitcoin while managing associated risks. Each contract represents 1/50 (0.02) of a Bitcoin, making it capital-efficient and accessible for investors.
These contracts expire every Friday at 4:00 p.m. New York time, aligning with the CME CF Bitcoin Reference Rate New York Variant (BRRNY), which allows them to closely track the spot price of Bitcoin.
Similar to Bitcoin futures (BTC) and Micro Bitcoin futures (MBT), BFF offers complete exposure to Bitcoin’s price movements without the need for direct ownership. This indirect exposure eliminates concerns related to physical asset storage, such as managing wallets, securing insurance, or the risk of losses from hacking.
While traditional futures contracts typically expire on a monthly or quarterly basis (like BTC and MBT), BFF contracts settle weekly. This shorter duration results in a reduced cost of carry, enabling BFF prices to align more closely with Bitcoin’s spot price.
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Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
