24.07.2024

CME Bitcoin Futures See Open Interest Surge as Global Volume Hits $25B

The figure is higher than any monthly close CME has seen since it debuted in December 2017, with July 2019 currently in the lead with 5,252 contracts.

Bitcoin derivatives trading looks set to reach record levels this month as volume spikes and open interest hovers near all-time highs.

Data from CME Group shows that as of Jan. 16, open interest for its futures products alone totaled 5,328 contracts – or 26,640 BTC ($237 million).

Open interest on track for record

Open interest did surpass current levels earlier in January, reaching around 5,400 according to the latest data from United States regulator the Commodity Futures Trading Commission, or CFTC, published on Jan. 7.

As Cointelegraph reported, futures offerings have received significant attention from both investors and commentators as new participants appeared to fuel a Bitcoin price rise in 2020.

Bitcoin futures 1-month overall volume

Bitcoin futures 1-month overall volume.

As BTC/USD accelerated towards $9,000 this week, overall futures trading volume likewise saw a significant uptick. According to unofficial data from monitoring resource Skew Markets, worldwide volume hit $25 billion – the most since late October.

“I think that’s a strong signal indicating that we’re reversing now and probably have bottomed out”, regular Cointelegraph contributor Michaël van de Poppe commented about the latest data.

2020 the year of “clear” institutional adoption

CME launched a new product in the form of options on Bitcoin futures earlier in January. The release came just days after competitor FTX did likewise.

The company said it considered the options a “success” as volumes reached 275 BTC by day two.

Catering to long-term demand from institutional investors has long been a preoccupation for cryptocurrency businesses. In its 2019 retrospective this week, venture capital giant Grayscale revealed annual investment totals of over $1 billion.

A record for the firm, executives announced they now it was “clear” that the industry was seeing institutional adoption.

China’s DCEP Unlikely to Impact Crypto Markets in the Long-term, eToro Analyst Says

China is taking a great leap forward to develop a central bank digital currency, with more than 80 patents filed by the People’s Bank last week.The 84 patents filed on Feb. 13 include proposals related to the supply and issuance of a central bank digital currencies (CBDC) as well as interbank settlements using the digital yuan and the integration of digital currency wallets into existing retail bank accounts, according to a recent report by the Financial Times.

While the Chinese government is still largely quiet on the initiative, the new patents signify China’s efforts to ramp up development work on its digital currency electronic payment (DCEP) system in a bid to outdo other major economies such the U.S. and the EU.

The latest developments are unlikely to impact crypto assets in the long-term, as the issuance of a digital yuan would be tightly controlled with no public mining or trading with existing cryptos, said eToro analyst Nemo Qin.

«Unlike most crypto assets, the DCEP will be a centralized, government-issued digital currency … with these factors, the DCEP should not have a direct impact on the crypto asset market”, Qin said.

The price of crypto’s largest asset, bitcoin (BTC), rose more than 40 percent, from $7,435 to $10,350 in October, 2019 after Chinese President Xi Jinping stated that his country should “seize the opportunities” afforded via blockchain technology.

As the markets digested the news and began to understand the intentions behind China’s move, prices for the bellwether crypto dropped by more than 37 percent before recovering by January of this year.

Indeed, China’s ambitions have encouraged more players to enter the space, with the Bank for International Settlements (BiS) setting up a group to discuss potential cases for interoperable CBDC’s.

“We can expect more central banks to announce developments in their own crypto assets using blockchain technology”, Qin added.

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