Thursday, January 27

CME seeks to expand customer base with Ethereum’s future micro offering

Chicago Mercantile Exchange (CME), specialized in futures contracts, announced the launch of ether (ETH) micro futures contracts, in an expansion of its cryptocurrency derivatives offering.

Futures contracts, which CME calls Micro Ether, have an underlying value of 0.1 ETH and are aimed at a wider range of participants, including institutions and individual traders, according to a press release.

The conventional ETH futures contracts offered by CME are worth 50 ETH. CME also points out that the new contracts provide market participants with an additional tool to hedge the risk of spot trading.

Last May, CME began trading bitcoin micro futures contracts, as reported by CriptoNoticias, with a value of 0.1 BTC per contract. In its last monthly statistics, CME states that the average daily value of bitcoin micro futures contracts is 27,600 daily contracts, which gives a total of more than 3.3 million contracts since the launch on May 3.

ETH micro futures contracts are more accessible

Bitcoin futures contracts are 5 BTC, which implies that the BTC micro futures contract is 50 times less than the conventional contract. For ETH micro futures, a 500 times ratio was chosen between the value of the ETH micro futures contract and the conventional contract.

An ETH micro futures contract would be more accessible to individual tradersAs it would cost approximately USD 439 plus commissions, while a BTC micro futures contract is trading close to USD 5,150, plus commissions, taking spot prices as a guide at the time of writing.

The prices of the futures contracts are determined by CME according to reference rates that come from the trading activity in the main spot exchanges.

Evolution of the spot price of bitcoin and eher in the last 30 days. Source: TradingView.

CME’s bitcoin futures contracts represented a significant boost during the 2017-2018 bull cycle, as both the announcement of the contracts and the launch of the contracts significantly boosted the price of bitcoin. The all-time high of December 2017 coincided with the launch of CME’s bitcoin futures on December 17 of that year.

The Ethereum cryptocurrency, although it fell in price from its historical maximum, its price decreased 9%, while bitcoin has declined 23% compared to its maximum value of November 10, according to the CriptoNoticias price index.

Compared to BTC, ETH reached a peak on December 6, of 0.085, as reported by CryptoNews. The last time ETH achieved that relationship with BTC was in May 2018.