Genesis Global Capital, a service focused on institutional investors, and Akuna Capital, a market maker on the futures market, carried out the first over-the-counter transaction with a large package of Bitcoin (BTC) futures traded on CME on the BTIC principle.
Thus, BTIC (Basis Trade at Index Close) implies an agreement between the buyer and the seller of futures contracts on the spread or basis. Which is added to the closing price of the index of the current day to determine the price of the futures. The tool is used for derivatives on stock indices.
The basis is agreed upon prior to the transaction and depends on the total financing rate. Also dividends (in the case of shares) and the time remaining until the contract repayment. The value can be either negative or positive.
“We are offering BTIC for our cryptocurrency futures for the first time. Such transactions provide real-time price determination in a regulated market for institutional participants. Who want to optimize positions between the futures and spot markets”. Commented Tim McCourt, head of Equity Index and Alternative Investment Products at CME Group.
Genesis explained that BTIC meets the needs of hedging counterparties which Bitcoin Reference Rate is guiding as a benchmark.
Micro futures for Bitcoin
Recall that on May 3, CME Group launched trading in micro futures for Bitcoin. The cost of futures under the ticker MBT with the calculation in cash is 0.1 BTC.
Announcing the instrument in March, CME said that a smaller contract will allow hedging price risks on the spot market and implementing trading strategies in an “efficient and cost-effective way”.
The product had over a million traded contracts by the end of June. Indicating that there is a large demand for smaller positions in crypto among institutional investors still testing the waters. This latest product is another illustration of how well-heeled investors can obtain exposure to crypto markets by broadening their options.