CME Group: Q1 2021 Bitcoin Futures Revenue ‘Higher Than the Entirety of Last Year’

On Wednesday (April 28), CME Group Inc. (NASDAQ: CME) reported financial results for Q1 2021, and during its earnings call (aka “Q&A conference call”), the company’s top executives talked about Bitcoin ($BTC) and Ethereum ($ETH) in the context of their current/future futures products.

In this article, we highlights some of the more interesting Bitcoin-related comments the CME executives made in response to questions (from analysts) during this conference call.

Sean Tully, Senior Managing Director, Global Head-Financial & OTC Products

“If you look at our first quarter of this year, the revenue was higher than the entirety of last year, and it was about $4.7 million in the first quarter. So it was a positive and for the first time, much stronger than in the past. With the launch of the new micro Bitcoins, today, let me talk about the large Bitcoin futures that we have. It’s 5 Bitcoins. And the margin requirements run typically more than $105,000 per contract. Obviously, that is extremely restrictive in terms of the number of participants and the types of participants who can be involved in that…

“With the new micro Bitcoin, it’s going to be 1/50 of the size. The micro Bitcoin future will have approximately $2,000 margin. So you can see how that opens up a much wider potential customer base for that product. In addition to that, while the notional size of that product is 1/50, the size of the large contract, it’s at 1/10 of a Bitcoin, the rack rate fees are 1/2 of our existing Bitcoin futures. So we’re looking forward to that launch. In addition to that, the fees relative to other exchanges will be significantly lower even at that fee rate. So we’re looking forward to that launch.“

Terry Duffy, Chairman & Chief Executive Officer

“And as it relates to the Ether contract, that’s a relatively new contract trading, Julie, with a couple thousand a day maybe, 2,000 a day. And we won’t say never to a micro Ether contract. But again, we’re going to continue to help nourish that contract along, and we’ll see how it goes. So we’ll make that decision when the time is right, if, in fact, the time is right. But right now, it was an appropriate move for us to work on the micro contract with Bitcoin. We have listed the contract for several years.“

Featured Image by “petre_barlea” via Pixabay.com

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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