Major Marketplaces Take Bitcoin More Seriously


For several years, there has been a distinct “them-and-us” categorization among trading platforms, exchanges and traders. It has been ‘them’, the established, old-school banks and derivatives exchanges, and ‘us’, the cryptocurrency traders and their newly flourishing environment consisting of specialist trading and storage systems for digital assets.

Never the twain would meet, and there has been a defined division, even when some retail electronic brokerages began to offer cryptocurrency CFDs a few years ago and were either unable to price them, or got bitten very hard by fluctuating prices and high leverage.

Nowadays, there is a meeting of minds to some extent, as major trading venues begin to realize that there is a vast pool of traders who want to trade cryptocurrency in a large, mainstream environment.

Today, CME Group, which is the world’s largest listed derivatives and futures marketplace, and a global leader in trading technology, surpassed a very important metric in that the trading volume on its recently introduced Micro Bitcoin Futures contract has surged past 500,000 contracts, which is particularly notable considering that the electronic derivatives exchange only began offering this product just three weeks ago.

Interest in the Micro Bitcoin Futures contract has been epic, especially during the last week when demand was driven to very high levels as a result of critical thinkers and speculators getting in on the action and becoming interested in Bitcoin trading following the enormous flash crash a week ago.

“We are pleased with the strong uptake and support we have seen for this new contract so early on in its first month,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. “At one-fiftieth the size of our larger Bitcoin futures, this new, smaller contract allows traders of all sizes to better manage their bitcoin price risk in an efficient, cost-effective way” he said.

Micro Bitcoin futures are cash-settled to the CME CF Bitcoin Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. Micro Bitcoin futures are listed on and subject to the rules of CME Group which incorporates four massive marketplaces which have been established for over 170 years, those being Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange and The Commodity Exchange.

This particular Bitcoin rush is of particular interest because it represents a massive upturn in interest in cryptocurrency by institutional and professional traders, as well as longstanding investors with vast and diversified portfolios.

The majority of CME Group’s activity is from derivatives traders, who pay substantial exchange membership and clearing fees, therefore it is not home to novices or knee-jerk speculators. On the contrary, most of CME Group’s traders, along with the majority of the Chicago-based derivatives and futures fraternity, are long-established masters of the commodities, raw materials and futures markets and work closely with senior members of brokerage staff from around the world.

Exchange clearing fees and membership fees are highly expensive, and the method by which such exchanges execute and clear traditional asset classes is complex and reliant on institutional technology vendors. For example, CME Group provides its standard, non-cryptocurrency futures contracts and options on futures using its CME Globex trading platforms, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates a central counterparty clearing provider, CME Clearing, and optimization and reconciliation services through TriOptima, along with trade processing services through Traiana.

It is therefore not aimed at those wishing to have a quick punt. 

The mere fact that CME added Micro Bitcoin Futures recently shows that cryptocurrency futures are a vital part of the modern derivatives trading ecosystem and that their value and market-moving capabilities along with the droves of people from all over the world who are now very much engaged in the cryptocurrency world is far too much to omit from the mainstream marketplace.

On this basis, given the unique nature of cryptocurrency and the need for a highly advanced exchange in which to trade or store it, CoinMetro’s standing as one of the only comprehensive exchanges which operates from one of the very few countries that has clear legislation on cryptocurrency licenses puts it in a unique position in that it offers the diversity of trading opportunities and high quality execution that has made the aforementioned futures product so popular, as well as being dedicated to all denominations of cryptocurrency without the enormous fees associated with traditional derivatives exchanges.

We are witnessing a massive move into the mainstream by cryptocurrencies, and the recent flash crash has done the opposite of what most flash crashes have done in history, that is to serve to increase demand and interest even further. 

The recent rises in volume, which have been evident among members of the global public who have never traded before and are now very focused on cryptocurrency as well as the clear, black and white figures demonstrated in trading volume of recently available asset classes such as the Micro Bitcoin Futures mentioned here shows that we are entering a new dimension. A dimension in which cryptocurrency has become the desired value store and speculative value accumulator in history.