CME launches options on Bitcoin futures
CME Group opened trading in options on its regulated Bitcoin futures, giving institutional market participants another familiar instrument for hedging and expressing views on Bitcoin.
On January 13, CME Group launched options on its Bitcoin futures contracts. The options settled into CME's existing futures market rather than requiring investors to hold bitcoin directly, extending the regulated derivatives infrastructure that CME had begun building with Bitcoin futures in 2017.
CME said its Bitcoin futures market had averaged more than 6,500 contracts per day in 2019, equivalent to roughly 32,500 BTC of notional exposure. Options added a tool institutions routinely use to manage downside risk, volatility and timing without changing the underlying custody model.
The launch did not mean that banks or asset managers were suddenly holding bitcoin on balance sheet, but it widened the set of conventional financial instruments available around Bitcoin. That made the event part of the gradual normalization of Bitcoin within established derivatives markets.