CME Group Plans to Launch Bitcoin Volatility Futures on June 1

CME Group plans to launch bitcoin volatility futures on June 1 pending regulatory approval. The new contracts will refer to the CME CF Bitcoin Volatility Index, or BVX, which represents the market's expectations for bitcoin volatility over the next 4 weeks.

The contracts will give traders a regulated way to invest in or hedge against future bitcoin volatility without taking a direct view on price direction.

Giovanni Vicioso, global head of cryptocurrency products at CME Group, said crypto market participants are seeking regulated products that provide opportunities to gain digital assets exposure when markets move. "With our new Bitcoin volatility futures, traders will be able to invest or hedge against the future volatility of bitcoin, allowing them to access a critical new layer of risk management," Vicioso said.

CME Group's bitcoin futures went live in December 2017.

Those contracts have since become a preferred instrument for institutions seeking directional exposure and arbitrage opportunities, generating billions in trading volume and open interest. The institutionalization of bitcoin accelerated with the debut of 11 spot-listed bitcoin ETFs in January 2024.

That was followed by rapid growth in options tied to BlackRock's IBIT, whose open interest has surpassed that of offshore venues such as Deribit.

U.S. institutions. Volatility exposure onshore has instead been achieved mainly through options and synthetic structures.

Sam Gaer, chief investment officer of Monarq Asset Management's Directional Fund, said the surge in IBIT options open interest signals strong institutional demand. "IBIT options open interest surpassing Deribit is a clear signal of institutional demand, and vol futures are the natural next step," Gaer told CoinDesk.

Gaer drew a parallel to traditional markets, where the CBOE Volatility Index, or VIX, did not reach deep liquidity until an ecosystem of exchange-traded funds and structured products developed around VIX futures rather than the spot index.

"VIX futures did not reach escape velocity until the ETF ecosystem developed around the futures (not the spot index, notably), and the same flywheel dynamic applies here," he said. CoinDesk reported that if CME's product construction and composition are clearly defined and easily disseminated, the launch has the potential to be a watershed moment for bitcoin volatility as an asset class.

48 percent, at the time of the announcement.

The planned June 1 launch would expand CME's existing suite of crypto derivatives. It arrives more than eight years after the exchange introduced bitcoin futures and nearly 16 months after the spot bitcoin ETFs began trading.