Bitcoin Futures Become More Popular Among Institutional Investors as CME Numbers Rise

The trading of Bitcoin futures has surged over this year as the leading cryptocurrency found its way back to the heights associated with it. Cryptocurrency trading has become more popular, and more investors are beginning to consider the asset class for the portfolios.

Chicago Mercantile Exchange (CME) has reported high record trading volumes for Bitcoin futures. The exchange is experiencing an average trade volume of 7,237 contracts daily as more traders are moving into Bitcoin futures.

This trading volume represents a growth of 132% from the same period in 2018. It is impossible to ignore the amount of growth that Bitcoin futures have gone through this year, and this is only driving more investors towards the asset class.

Growth of Bitcoin Futures

Starting late December 2018, Bitcoin entered a rally that saw the leading cryptocurrency’s price rise by over 300%. Bitcoin was trading at a low of around $3,000 before it went on a bull run that saw the crypto asset trade at almost $14,000 in June.

When Bitcoin broke the $6,000 resistance in May, it was quite clear that it was well on its way to reach record high prices.

For CME, August reflected continuous growth of the popularity of Bitcoin futures among institutional investors. Tim McCourt, CME’s managing director, said that the group had its most successful month with regards to Bitcoin futures.

McCourt went on to say that there is growing investor interest in digital assets and a growing interest in the various blockchain and cryptocurrency applications that are being developed across multiple industries. He added that it will be interesting to see how the technologies continue to develop and how the markets will respond to this development.

CME’s managing director reaffirmed the fact that the Group remains focused on its provision of crypto products. CME also provides its clients with educational tools about cryptocurrency in a bid to help these customers become more acquainted with digital assets and make better decisions when they are trading these assets.

CME’s Impact on Bitcoin Prices

It has long been assumed that the settlement of CME Bitcoin futures has a direct impact on the price of Bitcoin. Many crypto analysts share this belief, and Josh Olszewisz says that the bear market which commenced in December 2017 was a direct result of the settlement of Bitcoin futures on CME.

If this theory is anything to go by, Bitcoin traders can expect a period of high volatility by the end of the coming week. CME Bitcoin futures are expected to be settled within this week, and this may affect the cryptocurrency’s price.

The expiry of CME’s Bitcoin futures has met with the launch of Bakkt’s physically settled Bitcoin futures. These two occurrences may be enough to push Bitcoin out of the consolidation phase that it has been in for the last two months or so.

Whatever the case, Bitcoin traders will be paying close attention to the markets to see how the crypto asset performs over the next few weeks.

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Author: Ali Raza

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