On April 2, 2020, Futures linked to the bitcoin market experienced a spike in BTC trading volumes as its price spot rate broke above $7,000.
Cryptocurrency statistics analyst Skew highlighted in a Friday Tweet that trading activity on CME’s and Bakkt’s BTC derivatives platforms surged by approximately $595M and $27M, respectively. The move uphill left CME’s open interest as high as $217M, while Bakkt’s value of outstanding futures contracts topped at about $9.3M.
Analysts usually look at Bitcoin Futures’ data as a gauge of institutional interest in Bitcoin and other crypto-assets.
The higher the Open Interest gets, the more it confirms BTC as a matured asset class, while revealing that more folks are betting on BTC’s future price.
The Increase in BTC Trading Volume Shows a Growing Demand Among Big Market Players
Bakkt offers to settle bets on their Futures platform via BTC, creating a great demand for the number one crypto asset.
Matt Hougan, the global head of research at crypto asset management firm Bitwise, analyzed the recent volume spike on CME’s BTC derivatives as a sign to BTC’s growing demand amongst investors. He tweeted:
“Today is the first day in a while that CME bitcoin futures volume has significantly exceeded Coinbase BTC trading volume, an early signal that institutions may be starting to look at crypto again.”
The encouraging Skew reports for crypto lovers emerged as the global economy continued to suffer losses due to the fast-spreading Coronavirus epidemic.
The US Federal Reserve recently announced a stimulus package to boost the economy, which comprises a near-zero interest rate and a $2 trillion cash injection.
Bulls for a long time have projected the economic stimulus package as a slow poison for the US dollar. As the pandemic spreads, the dollar’s over-supplied nature could cause massive inflation in the long run, a scenario that usually leads investors to put part of their money in deflationary assets, such as Bitcoin.
BTC Reemerges as a Safe-Haven Asset
The spikes in CME’s and Bakkt’s daily volume fundamentally demonstrates that bitcoin’s safe-haven status is still thriving. That’s because experts believe that there is sufficient demand for the digital token among investors wishing to safeguard their fiat-enabled savings from central banks’ inflationary measures.
BTC is currently being traded at around $6,776 by press time, showing a steady recovery from the bloodshed of previous weeks. As a result, the business of derivatives trading is also showing a strong recovery, increasing BTC trading volume and acceptance.
If Bitcoin keeps this bullish trend at least for the coming week, the markets could begin an optimistic path towards canceling all the losses experienced during the recent black Thursday collapse.