CME Reports: Bitcoin Futures Trading Grows 93% in Quarter 2 This Year
A recent tweet from CME Group, one of the first companies to offer bitcoin futures trading, reports that average daily trading volumes are up 93% and open interest surpassed 2,400 contracts, a 58% increase.
The tweet from CME Group reads in part:
“Bitcoin futures average daily volume in Q2 grew 93% over the previous quarter, while open interest surpassed 2,400 contracts, a 58% increase.”
The CME Group began offering BTC futures on December 17, 2018 subsequent to the launch of Bitcoin futures pioneered by the Chicago Board Options Exchange. The availability of Bitcoin futures has remained a point of debate within the cryptocurrency community, catalyzing discussions of price manipulation.
The key implication of increased bitcoin futures ADV is that it confirms the strength of bitcoin as an asset class. At a time when bitcoin shed a significant amount of its value, the fact that the market recorded a 93 percent growth from one quarter to the next indicates that the market now views bitcoin as a sustainable and robust asset class with good future prospects.
The open interest (OI) rate refers to the number of open contracts on bitcoin futures. A 58 percent jump on Q1 indicates that there is a high level of market interest in trading bitcoin futures because many contracts are still open. Investors will doubtless be keeping a close eye on the bitcoin futures market because an OI growth of 58 percent from Q1 to Q2 indicates that the amount of money flowing into the market is increasing at a rapid rate.
Cboe Global was the first to offer bitcoin-based futures and is the largest U.S options exchange. According to Cboe’s daily market statistics, on July 20, 2018, its open interest for bitcoin-based futures stood at 4,416, with trading volume of 5,170. Historically, Cboe has seen greater overall volume than CME Group. On April 25, 2018, Cboe recorded a record 18,000 contracts.
The general and sustained market interest in this asset class means that more financial institutions and investors who previously did not place much stock in bitcoin and crypto may now be attracted to the asset class because of its sheer ubiquity. Already this seems to be happening, as a number of institutions have publicly announced that they are reevaluating their stance on bitcoin.
The recent surge in Bitcoin futures interest follows an increase in the level of institutional investors entering the cryptocurrency market, recent industry movement has seen Coinbase launch a custodian solution for institutional investors resulting in the capture of a $20 billion hedge fund that will expand the financial services offered by the platform.
BlackRock Inc, the world’s largest provider of ETFs has reportedly assembled a working group to investigate cryptocurrency-based products. The news may have contributed to last week’s hike in cryptocurrency market prices as investors were encouraged by the additional interest in today’s new financial markets.
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