Opening price below $1, CME expected to launch Bitcoin event contracts in March

The Chicago Mercantile Exchange (CME) has announced that its latest cryptocurrency product, "Bitcoin Event Contracts," is currently awaiting final regulatory approval and is set to be launched on March 13th.

Bitcoin Event Contracts

The Chicago Mercantile Exchange (CME) has previously launched event contracts for various indices, precious metals, commodities, and foreign currencies.

In this product, traders must predict whether the market closing price will be higher than a specific price. Different prices are offered to traders depending on their bullish or bearish sentiment, as shown in the image below.

According to the official website, the opening cost of event contracts ranges from $0.25 to $19.75 and varies based on the difference between the actual price and the predicted price. If a user pays $13 for the opening and predicts correctly, the profit will be $7; otherwise, they will lose $13.

In the example above, a 5x opening price would imply an 80% probability of the event contract being realized.

Tim McCourt, CME Group's Stock and Forex Products Manager, stated:

The new event contract product provides investors with a highly transparent and uncomplicated way to access the crypto market, with prices tracking the CME BTC-USD futures, offering a low-cost trading alternative.

A spokesperson for CME told Blockworks that the audience for event contracts will be retail traders and crypto market enthusiasts, with over 50% of event contract traders being new users to CME by the end of 2022.

CME's Cryptocurrency Product Timeline

• 2017/12: Bitcoin Futures | Contract Size: 5 BTC

• 2020/1: Bitcoin Options | Contract Size: 5 BTC

• 2021/2: Ethereum Futures | Contract Size: 50 ETH

• 2021/5: Micro Bitcoin Futures | Contract Size: 0.1 BTC

• 2021/12: Micro Ethereum Futures | Contract Size: 0.1 ETH

• 2022/3: Micro Bitcoin, Ethereum Options | Contract Size: 0.1 BTC, 0.1 ETH

According to the annual report summarized by CryptoCompare, CME saw a 49.2% decrease in trading volume in 2022, totaling $142 billion, marking a new low since October 2020.