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▲ Cryptocurrency Trading
As CME Group, the central pillar of the US derivatives market, announced a regulated futures product for trading Bitcoin volatility itself, institutional investors' approach to cryptocurrency derivatives is expanding from betting on price direction to managing volatility.
According to Cointelegraph, a cryptocurrency specialized media outlet, on May 6 (local time), CME Group plans to launch Bitcoin (BTC) volatility futures on June 1, following regulatory review. This product is designed to allow investors to invest in expected volatility or hedge risk, rather than betting on Bitcoin price direction.
The new contract will be settled based on the CME CF Bitcoin Volatility Index, a 30-day expected Bitcoin volatility indicator calculated in the CME options market. CME Group described the product as Bitcoin volatility futures operating under the regulation of the U.S. Commodity Futures Trading Commission (CFTC).
Giovanni Vicioso, CME Group's Global Head of Cryptocurrency Products, stated that market participants are looking for regulated products that can provide exposure to market movements, and that the new futures will offer a means to invest in or hedge against future Bitcoin volatility. David Schlageter, Morgan Stanley's Head of Derivatives Sales, said the contract would help market participants manage portfolio risk by trading volatility itself.
This product is significant in that it allows institutional investors to trade Bitcoin volatility in a regulated manner within the United States through CME's clearing system, without relying on offshore exchanges or combinations of Bitcoin options and futures. CME Group introduced this contract as the first regulated futures contract distinct from existing crypto-native volatility products.
Similar products already exist in other markets. Deribit launched Bitcoin DVOL futures linked to an implied volatility index in March 2023, and BitMEX introduced Bitcoin BVOL 30-day historical volatility futures in January 2015. CME Group has expanded its regulated cryptocurrency product offerings since first introducing cash-settled Bitcoin futures in December 2017, including Bitcoin options, Micro Bitcoin futures and options, and Ethereum (ETH) futures and options.
CME Group is also preparing to switch to 24-hour trading for cryptocurrency futures and options starting May 29, subject to regulatory review. Coinglass estimates cryptocurrency derivatives trading volume to be approximately $85.7 trillion in 2025, and Amina Group analyzes that derivatives account for about three-quarters of all cryptocurrency trading. Cointelegraph reported that as the cryptocurrency derivatives market grows, CME Group's new product could play a role in bringing institutional investors' volatility trading under US regulatory jurisdiction.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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