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Micro Bitcoin contracts?

The Chicago Mercantile Exchange, or CME, has officially launched its latest Bitcoin ( BTC ) derivatives product, laying the groundwork for broader adoption of the digital asset into the mainstream. 

TIm McCourt, global head of equity indices and alternative investment products for CME Group, said the new product will provide "an efficient and cost-effective way for a wide range of market participants - from institutions to sophisticated, active traders - to fine-tune their exposure to bitcoin and improve their trading strategies."

The Micro Bitcoin futures contract is worth 0.1 BTC, providing traders with an additional tool to hedge the digital currency's price risk.

JB Mackenzie, managing director of TD Ameritrade Futures and Forex, said that Micro Bitcoin futures solve two of the biggest problems associated with investing in cryptocurrencies - "namely, high costs and the desire to engage in a regulated environment."

Citing growing demand for smaller contracts, CME Group first announced its intention to launch a micro BTC derivative product on March 30. At that time, 1 Bitcoin was worth about $58,000, which is not dissimilar to current prices. The leading digital currency surged above $64,000 in April before a significant correction.

The use of cryptocurrency derivatives has grown exponentially since CME launched the first-ever bitcoin futures contract in December 2017. Although the Chicago Board Options Exchange quickly followed suit, the crossover rival eventually dropped its product offering.

Cryptocurrency trades accounted for 55% of the total market in December 2020 . That number is likely to rise as derivatives exchanges such as Bybt, FTX and BitMEX remain targets for traders seeking excessive exposure to digital assets.