According to the CME Group, the newly introduced event contracts on Bitcoin futures make it possible for a wide variety of investors to gain access to the Bitcoin market through a fully regulated exchange in a low-risk and highly transparent method.
The well-known derivatives trading platform CME Group revealed on Monday, March 13, that they had started trading event contracts on Bitcoin futures. This news came on the same day that trading had begun.
The CME Group stated (1) that this new offering would serve as an extension to the firm’s suite of 10 event contracts tied to its benchmark futures market.
These kinds of contracts also called prediction contracts and information contracts, stipulate a payout based on the occurrence of a predetermined set of events.
Since they are short-term, they become payable in cash upon expiration each day.
CME Group’s Global Head of Equities and FX Products, Tim McCourt, made the following statement:
“We are pleased to announce the launch of our new event contracts on Bitcoin futures, which offer a variety of investors a low-risk and highly transparent option to gain access to the bitcoin market through a fully regulated exchange. ”
These cash-settled, daily expiration contracts will add to our existing suite of 10 event contracts related to our benchmark futures markets. To this point, more than 550,000 contracts have been traded concerning these markets.”
In addition, the new contracts will provide investors with a novel and more cost-effective opportunity to trade their views on whether the bitcoin price will go up or down.
As was previously mentioned, the CME Group is now issuing event contracts for an increasing number of the benchmark futures markets it operates.
This covers gold, silver, crude oil, copper, natural gas, E-mini Nasdaq-100, E-mini S&P 500, E-mini Dow Jones Industrial Average, E-mini Russell 2000, and foreign exchange futures involving the euro and the US dollar.
Cryptocurrency and the CME Group
The CME Group was one of the earliest pioneers in the cryptocurrency market, and in December 2017, it introduced the world’s first Bitcoin futures contracts, which were paid in cash.
Since then, the CME Group has been expanding its offerings of cryptocurrency derivatives by releasing additional products into the market.
The Chicago Mercantile Exchange (CME) has also increased its presence in international marketplaces outside the United States. Bitcoin and Ether futures denominated in euros were introduced by this company the year before.
To expand its presence in the Web3 space, the CME Group collaborated with CF Benchmarks earlier this year to create three Metaverse reference rates. This was done to expand its footprint in the Web3 arena.
Axie Infinity (AXS), Chiliz (CHZ), and Decentraland are the three cryptocurrencies that make up these Metaverse reference rates (MANA).
According to Giovanni Vicioso, CME Group’s Global Head of Cryptocurrency Products, “as we proceed to see a heightened interest in Metaverse projects, CME Group, in collaboration with CF Benchmarks, will broaden its package of governed, non-tradable Cryptocurrency Reference Rates & Real-Time Indices to include three new Metaverse tokens.”