CME to Launch US-Regulated Bitcoin Volatility Futures

CME Group plans to begin trading CFTC-regulated Bitcoin volatility futures on June 1 that will settle to the CME CF 30-day Bitcoin Volatility Index. The contracts are subject to regulatory review and will clear through CME’s existing clearing framework.

The CME CF 30-day Bitcoin Volatility Index measures expected 30-day volatility using prices from CME’s Bitcoin options markets. The futures are cash-settled and are designed to give traders exposure to expected Bitcoin volatility rather than to the cryptocurrency’s price direction.

CME described the contracts as the “first-of-their-kind regulated futures contracts,” and said the product differs from volatility offerings available on non-U.S. crypto platforms. The onshore contracts would let institutions trade Bitcoin volatility directly through CME’s clearinghouse, which could simplify margining and counterparty arrangements compared with assembling similar exposure through options and futures or trading on overseas venues.

The exchange is also preparing to move its cryptocurrency futures and options to 24/7 trading effective May 29, pending regulatory approval, to align market hours with the around-the-clock nature of digital assets.

Giovanni Vicioso, CME Group’s global head of cryptocurrency products, said market participants are seeking regulated products that offer exposure to market moves and that the new futures let traders invest in or hedge against future Bitcoin volatility. Morgan Stanley managing director David Schlageter commented that the contracts should help market participants manage portfolio risk by allowing them to trade volatility directly.

Similar volatility products exist outside the U.S.: Deribit launched BTC DVOL futures tied to an implied-volatility index in 2023, and BitMEX introduced a 30-day historical volatility futures contract in 2015. CME began offering cash-settled Bitcoin futures in December 2017 and has since added Bitcoin and Ether options, Micro Bitcoin futures and options, and other cryptocurrency contracts.

Pending final regulatory approval, the June 1 launch will add a regulated instrument focused on Bitcoin volatility to the U.S. market, allowing investors a direct, cleared method to trade or hedge volatility exposures within the U.S. futures regulatory and clearing structure.