Bitcoin Futures Volume Increased 90% – What Next?
According to recent trade data released by the Chicago Mercantile Exchange (CME), Bitcoin Futures Volume increased 90% or nearly doubled in the second quarter of 2018. The Average Daily Volume (ADV) in the CME’s Bitcoin futures was up 93% from the first quarter. Bitcoin futures came onto the forefront late 2017 and many of the largest investment banks in the world are contemplating getting involved are at least discussing the ramifications.
The CME listed Bitcoin futures after the CBOE allowed trading in Bitcoin-linked contracts last year. Despite the success of Bitcoin futures with traders, a report from the Federal Reserve cited the introduction of Bitcoin futures as one of the reasons why Bitcoin fell from the highs it hit last December.
Are Bitcoin futures to blame?
There are many opinions and theories about why Bitcoin prices fell from nearly $20,000 USD to where they are trading now. Some university-led research proposed that Tether used freshly raised capital from sales of USDT to drive up the price of Bitcoin late last year, 2017.
The reasons why Tether would want to trade cash for Bitcoin at record high prices were not addressed by the authors of the study, but they did supply ample statistical evidence of a possible correlation between the sale of USDT, and a rise in Bitcoin prices.
Leaving last years peak in Bitcoin prices to one side, there have been numerous investment banks that are working on opening up trade in Bitcoin futures, and also cryptocurrencies. This movement towards greater integration between the existing financial system and cryptocurrencies is probably a result of increasing interest in the space among investors and particularly Bitcoin Futures Volume Increased 90% in 2nd quarter 2018.
Goldman Sachs stated that they are working on their own Bitcoin futures, which would be sold directly to their clients. They have yet to announce the opening of trade in crypto futures, but their new found interest in Bitcoin is a far cry from the attitude that prevailed on Wall Street last year. The big dogs see the fact that Bitcoin Futures Volume increased 90%+ and when there is money to be made, they will follow.
Impossible to ignore Bitcoin
In addition to Bitcoin Futures volume increased on the CME, they also saw a rise in open interest. When more traders open up contracts in a specific security, the open interest rises. It is easy to infer that traders in the established financial community want to gain access to the Bitcoin market.
Other financial institutions have expanded their cryptocurrency services past brokering futures contracts that don’t convey any ownership in the underlying instrument. Susquehanna Financial has opened up its cryptocurrency desk to more clients. Unlike the CME, CBOE, and Goldman Sachs, Susquehanna allows their clients to buy cryptocurrencies outright.
Earlier in July this year, ETF, the biggest exchange-traded fund supplier in world, BlackRock, revealed that it is looking into forming a working body to determine whether or not they should invest in Bitcoin (BTC) Futures. However, the fact that the firm is looking to launch Bitcoin (BTC) Futures represents a shift for BlackRock, because the startup has been critical to cryptocurrencies in recent years… just as the others.
What do you think about Bitcoin Futures Volume increaseing by more than 90% in 2nd Quarter 2018? Comment below
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