Nasdaq and CME Group bolster Bitcoin market with new trading options

Two prominent financial institutions in the US—Nasdaq and CME Group—have launched new Bitcoin-related products as institutional adoption of the top crypto continues.

According to an Aug. 27 announcement, Nasdaq has partnered with CF Benchmarks to file with the US Securities and Exchange Commission (SEC) to list and trade Nasdaq Bitcoin Index Options (XBTX).

XBTX

The XBTX options will allow investors to manage and hedge their BTC positions. These options will track the underlying asset through the CME CF Benchmarks Bitcoin Real-Time Index (BRTI).

XBTX will feature European-style exercise and cash settlement. The final settlement value will be based on the CME CF Bitcoin Reference Rate – New York Variant (BRRNY) price at expiration, divided by 100.

Nasdaq vice president and head of exchange business management Greg Ferrari highlighted that the partnership merges the innovative crypto space with the reliability of traditional securities markets. He emphasized that this move would be a key milestone in the digital assets market’s growth.

Sui Chung, CEO of CF Benchmarks, noted that these regulated crypto derivatives will enable investors to gain more nuanced exposure to Bitcoin, complementing the market’s popular spot exchange-traded funds (ETFs).

BFF

In a related development, CME Group, the world’s largest futures exchange, will launch Bitcoin Friday futures (BFF) on Sept. 30, 2024, targeting retail investors.

Each BFF contract will represent one-50th of a BTC and offer a cost-effective and accessible way to trade the top digital asset. Based on the CME CF Bitcoin Reference Rate New York Variant, these contracts expire every Friday at 4:00 P.M. ET.

Giovanni Vicioso, CME Group’s Global Head of crypto Products, explained that the weekly expiring, smaller-sized contracts will allow investors, from institutions to active retail traders, to fine-tune their bitcoin exposure on a regulated exchange.

He added:

“By settling to the BRRNY, the benchmark used by leading spot bitcoin ETFs, traders will also benefit from growing liquidity and the ability to more efficiently capture market moves during US hours.”

CME has benefited from renewed institutional interest in Bitcoin and briefly surpassed Binance as the world’s largest Bitcoin futures market earlier this year.

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