CME Group Inc. (NASDAQ: CME) announced plans to launch Bitcoin Volatility futures contracts on June 1, pending regulatory review. The derivatives marketplace said the contracts will allow investors to manage volatility risks separately from price direction.

The futures will settle to the CME CF Bitcoin Volatility Index (BVX), which measures 30-day forward-looking implied volatility. The index derives data from real-time CME Bitcoin options order books and publishes updates every second from 7 a.m. to 4 p.m. Central Time.

"Crypto market participants are seeking regulated products that provide opportunities to gain digital assets exposure when markets move," said Giovanni Vicioso, Global Head of Cryptocurrency Products at CME Group. "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."

The company describes the contracts as the first regulated futures specifically targeting Bitcoin volatility. Morgan Stanley's David Schlageter, Manager Director and Head of Derivatives Sales, said the product will help market participants manage portfolio risk by directly trading volatility.

CF Benchmarks CEO Sui Chung noted that the CME CF Bitcoin Reference Rate has previously served as a benchmark for regulated derivatives, ETFs and lending markets. The company expects similar development around the volatility index with these CFTC-regulated futures contracts.

CME Group operates exchanges across interest rates, equity indexes, foreign exchange, cryptocurrencies, energy, agricultural products and metals through its CME Globex platform.