CME: Micro Bitcoin Futures ( 
MBT1!)
On the morning of March 2nd, President Donald Trump posted a tweet to reinforce his commitment to a Crypto Strategic Reserve, including XRP, SOL and ADA.
Cryptocurrency market took off immediately. Despite not being mentioned in the tweet, Bitcoin shot up from $78,400 to $83,900, and Ethereum from $2,090 to $2,240.
Later in the afternoon, President Trump posted an update and clarified that BTC and ETH will be in the Reserve. “I also love Bitcoin and Ethereum!”, he tweeted.
At the time of this writing, BTC is quoted $94,308, up 20.3% since the first tweet. ETH is trading at $2,520, up 20.6% within the day.
We are in a new age of cryptocurrencies, where BTC, ETH, XRP, SOL and ADA just gained the official backing of the US Government. This day has been in the making for months.
• On May 24, 2024, then presidential candidate Trump promised to launch a national crypto stockpile if he wins the election. Investors warmed to this idea and Bitcoin lifted 18%
• On November 5, 2024, Trump won the US election. Market cheered for the most pro-crypto president and Bitcoin shot up 57% in a month
• On January 23, 2025, President Trump signed the “Executive Order to establish United States leadership on digital financial technology.” Bitcoin went up 17%
• Recent events have brought bitcoin down 28% since reaching its all-time-high of $109,241. In a matter of two tweets, the crypto market has completely turned around
Bitcoin for the Long Haul
A year ago, I published this market commentary, “A Bitcoin Bull Run?”, and laid out the key drivers for bitcoin’s long-term rise.
Limited supply, increased demand and excessive liquidity helped bitcoin prices doubled in a year. In my opinion, these tailwinds remains intact for bitcoin in the coming months. On top of these, we now have the explicit endorsement from a sitting US president. Therefore, I stay bullish for holding bitcoin for the long haul.
Trading with Micro Bitcoin Futures
On “HODL with a Twist”, published on May 6, 2024, I explored using Futures Rollover strategy to invest in CME Micro Bitcoin Futures (
MBT). This strategy worked nicely in the past, and I favor to continue deploying it. The paragraphs below provide a brief update with new contract months and new price data.
Firstly, using futures over spot bitcoin provides these compelling advantages:
• Capital efficiency in using margins. A trader could invest with as little as $2,075 to take on the full exposure of $9,431 (1/10th of a bitcoin)
• Futures contracts come with build-in leverage. For MBT, it is approximately 4.5 times (= 9431/2075). If bitcoin moves 10% in your favor, you could gain 45% with futures
• Price protection. MBT has a daily price limit (limit-up and limit-down) at 10%. In a volatile day with big moves, the Exchange will pause trading at the prescribed limits
Secondly, futures contracts have a limited lifespan that will influence the outcome of your trades and exit strategy. Micro Bitcoin futures are traded actively in the nearby March and April contracts. Liquidity in the back-month contracts has yet to pick up.
Rollover is when a trader moves his position from the front month contract to another contract further in the future, prior to the expiration of his existing holding.
Below is an illustration on how to hold a long MBT position overtime:
• In March, a trader buys (going long) April contract (MBTJ5) at $94,308
• In April, the trader enters an offsetting trade, going short on MBTJ5, to close his existing position. He would book a profit or loss, determined by the difference in selling price and purchasing price
• Simultaneously, the trader would buy May MBT contract (MBTK5) and re-establish a long position in Bitcoin
• In May, the trader will close out MBTK5 (going short) and buy June (MBTM5)
• The trader would repeat the above steps, so far as he holds a bullish view
Finally, Bitcoin prices are extremely volatile. Holding spot Bitcoin with no leverage could face potential drawdown of 70%-80%. With the leverage in futures, a sharp price move in the wrong direction could quickly deplete the available fund and trigger margin calls.
Trader could set up a stop-loss in the buy order, limiting the maximum loss. Hypothetically, he could set the stop-loss at $85,000 when executing long futures at $94,308. If bitcoin moves sharply down, the maximum loss will be $931 (= (94308-85000)*0.1). His margin account will be decreased to $1,144 from $2,075.
To learn more about all the Micro futures and options contracts traded on CME Group platform, you can check out the following site:
cmegroup.com/markets/microsuite.html
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
MBT1!)On the morning of March 2nd, President Donald Trump posted a tweet to reinforce his commitment to a Crypto Strategic Reserve, including XRP, SOL and ADA.
Cryptocurrency market took off immediately. Despite not being mentioned in the tweet, Bitcoin shot up from $78,400 to $83,900, and Ethereum from $2,090 to $2,240.
Later in the afternoon, President Trump posted an update and clarified that BTC and ETH will be in the Reserve. “I also love Bitcoin and Ethereum!”, he tweeted.
At the time of this writing, BTC is quoted $94,308, up 20.3% since the first tweet. ETH is trading at $2,520, up 20.6% within the day.
We are in a new age of cryptocurrencies, where BTC, ETH, XRP, SOL and ADA just gained the official backing of the US Government. This day has been in the making for months.
• On May 24, 2024, then presidential candidate Trump promised to launch a national crypto stockpile if he wins the election. Investors warmed to this idea and Bitcoin lifted 18%
• On November 5, 2024, Trump won the US election. Market cheered for the most pro-crypto president and Bitcoin shot up 57% in a month
• On January 23, 2025, President Trump signed the “Executive Order to establish United States leadership on digital financial technology.” Bitcoin went up 17%
• Recent events have brought bitcoin down 28% since reaching its all-time-high of $109,241. In a matter of two tweets, the crypto market has completely turned around
Bitcoin for the Long Haul
A year ago, I published this market commentary, “A Bitcoin Bull Run?”, and laid out the key drivers for bitcoin’s long-term rise.
Limited supply, increased demand and excessive liquidity helped bitcoin prices doubled in a year. In my opinion, these tailwinds remains intact for bitcoin in the coming months. On top of these, we now have the explicit endorsement from a sitting US president. Therefore, I stay bullish for holding bitcoin for the long haul.
Trading with Micro Bitcoin Futures
On “HODL with a Twist”, published on May 6, 2024, I explored using Futures Rollover strategy to invest in CME Micro Bitcoin Futures (
MBT). This strategy worked nicely in the past, and I favor to continue deploying it. The paragraphs below provide a brief update with new contract months and new price data.Firstly, using futures over spot bitcoin provides these compelling advantages:
• Capital efficiency in using margins. A trader could invest with as little as $2,075 to take on the full exposure of $9,431 (1/10th of a bitcoin)
• Futures contracts come with build-in leverage. For MBT, it is approximately 4.5 times (= 9431/2075). If bitcoin moves 10% in your favor, you could gain 45% with futures
• Price protection. MBT has a daily price limit (limit-up and limit-down) at 10%. In a volatile day with big moves, the Exchange will pause trading at the prescribed limits
Secondly, futures contracts have a limited lifespan that will influence the outcome of your trades and exit strategy. Micro Bitcoin futures are traded actively in the nearby March and April contracts. Liquidity in the back-month contracts has yet to pick up.
Rollover is when a trader moves his position from the front month contract to another contract further in the future, prior to the expiration of his existing holding.
Below is an illustration on how to hold a long MBT position overtime:
• In March, a trader buys (going long) April contract (MBTJ5) at $94,308
• In April, the trader enters an offsetting trade, going short on MBTJ5, to close his existing position. He would book a profit or loss, determined by the difference in selling price and purchasing price
• Simultaneously, the trader would buy May MBT contract (MBTK5) and re-establish a long position in Bitcoin
• In May, the trader will close out MBTK5 (going short) and buy June (MBTM5)
• The trader would repeat the above steps, so far as he holds a bullish view
Finally, Bitcoin prices are extremely volatile. Holding spot Bitcoin with no leverage could face potential drawdown of 70%-80%. With the leverage in futures, a sharp price move in the wrong direction could quickly deplete the available fund and trigger margin calls.
Trader could set up a stop-loss in the buy order, limiting the maximum loss. Hypothetically, he could set the stop-loss at $85,000 when executing long futures at $94,308. If bitcoin moves sharply down, the maximum loss will be $931 (= (94308-85000)*0.1). His margin account will be decreased to $1,144 from $2,075.
To learn more about all the Micro futures and options contracts traded on CME Group platform, you can check out the following site:
cmegroup.com/markets/microsuite.html
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
Jim W. Huang, CFA
jimwenhuang@gmail.com
cmegroup.com/markets/microsuite.html
jimwenhuang@gmail.com
cmegroup.com/markets/microsuite.html
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Jim W. Huang, CFA
jimwenhuang@gmail.com
cmegroup.com/markets/microsuite.html
jimwenhuang@gmail.com
cmegroup.com/markets/microsuite.html
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.