CME Group to Launch First Weekly Time-Limited Bitcoin Futures

Chicago-based CME Group, the world’s leading derivatives marketplace, announced today, August 27, 2024, its plans to launch the first weekly time-limited Bitcoin futures. Set to go live on September 20, 2024, the weekly Bitcoin futures, branded as Bitcoin Friday Futures (BFF), is a deliberate move by the company to provide a more flexible way to trade Bitcoin exposure. However, its launch is subject to regulatory approval, CME revealed.

Unlike existing Bitcoin futures, which expire on the last Friday of each month, the Bitcoin Friday Futures offer a shorter trading period, with an expiration timeline of one week. They are designed to expire based on the “CME CF Bitcoin Reference Rate New York Variant every Friday at 4:00 p.m. ET,” thereby mitigating potential weekend risk. According to CME, the shorter duration should allow the futures contract to track Bitcoin’s spot price more closely.

“Contracts will be listed on Thursdays at 6:00 p.m. New York time for the Friday trade date, allowing participants to trade the nearest two Fridays at any given point,” CME Group stated.

The BFF contract trades at one-fiftieth of a Bitcoin, allowing users to benefit from potential margin offsets and smaller capital commitments. To ensure transparency, CME Group noted that the Bitcoin futures would trade on a CFTC-regulated platform.

How Bitcoin Friday Futures are Settled

The Bitcoin Friday Futures are settled daily, based on the specific “volume-weighted average price (VWAP) of CME Globex trades” recorded between 2:59 p.m. and 3:00 p.m. The final settlement value of the BFF is calculated based on the “underlying CME CF Cryptocurrency Bitcoin Reference Rate,” which is published at 4:00 p.m. on the expiration day.