CME: derivatives trading on BTC rose before halving rewards

The Chicago Mercantile exchange (CME) claims record trading activity for derivatives on BTC, reflecting institutional interest in the upcoming halving of Bitcoin.

In a report, CME reported that the strong growth in bitcoin derivatives trading volumes last week demonstrates that institutional investors are showing more interest in BTC due to the upcoming halving
rewards for bitcoin miners.

Since the beginning of 2020, trading in derivatives on BTC has started on 844 unique accounts, mainly used by institutional and professional investors. Thus, the number of market participants has doubled compared to the same period last year.

The average daily volume (ADV) of bitcoin futures trading since the beginning of the year was 8,456 contracts, which is 43% more than for the same period in 2019. Total trading volume of BTC option contracts that were launched
in mid-January, it reached 2,250 contracts. At the same time, a record number of contracts – 216 lots-were exchanged on may 6.

As of may 7, the number of open futures and options contracts reached
9,800 (about $423 million in BTC) and 555 contracts (about $4.8 million in BTC), respectively. The average daily amount of unrealized contracts increased by 33% compared to the same period last year, CME notes.

“Due to the fact that this week should see the halving of bitcoin miners’ rewards, trading in futures and options on BTC on CME has grown significantly in the run – up to this important event,” CME States.

The growth of interest in bitcoin derivatives was commented on by Brian Wong, co-founder and product Director of the BTSE futures exchange. He said that for funds that have not previously invested in bitcoin, the comments of the Manager of the hedge Fund Tudor BVI, Paul Tudor Jones (Pol Tudor Jones), could be a “go-ahead”. Last week, he said that bitcoin will perform well as a hedging asset with growing risks of inflation.

In an entry published last week
in a blog post, CME noted that the upcoming halving will be the first such event for a reliable and liquid derivatives market. Market participants can now create much more complex positions, and miners can fix their positions and hedge them in the run-up to halving. Thus, ” oversupply on the part of miners, in all likelihood, will not restrain the growth of the price of bitcoin.”