CME beats Bakkt in drawing institutional Investment


One of the growing alternatives to directly buying and selling Bitcoin is Bitcoin options trading. Options are a way to bet on a price move up or down by an investment without buying the investment itself. It’s gaining traction because it provides more flexibility and a wider range of strategies than simply trading on a crypto exchange.

Bakkt, the ICE-backed platform, had launched with a promise to push for bitcoin adoption by appealing to institutional investors and ultimately upsurge crypto spending to high levels. The journey has been a success so far as the platform has now grown immensely with more trading products, expanded custodial services, and a consumer payments app.

The growth of traditional forms of trading entering the Bitcoin space has often been associated with a maturing market. The Bakkt BTC futures contracts that started off slow had soon picked up the pace with 1741 BTC ($15.5 million) worth of contracts traded in one day in November. This followed another record in December as the ICE-backed crypto exchange managed to trade close to $50 mln worth of its physically-settled Bitcoin futures on Dec. 18.

CME beats Bakkt 

Bakkt introduced Bitcoin options based on Monthly Bitcoin Futures contract on December 9 but hasn’t been able to draw much volume so far. CME, which has been another major player that started off since 2017, launched options on Bitcoin (BTC) futures on January 13. The platform has now doubled its trading volume in the first week from launch.

As per data provided by CME, volume on January 17 was 122 contracts, which is worth 610 BTC ($5.27 million). On the other hand, the volume on day one was almost half at 55 contracts, or 275 BTC (currently worth $2.37 million). Bakkt reached a volume of USD 178,000 on the same day.

CME’s growth in the institutional segment was also showcased in the latest Arcane Research report that noted that “it seems that the institutional investors are preferring CME for now.”

Even though the majority of investors in futures trading are still coming from traditional cryptocurrency exchanges, such as Huobi, BitMex, OKEx and Binance, regulated platforms like CME and Bakkt continue to act as a bridge for institutional investors to step into the cryptocurrency market without facing the risks.

Cryptocurrency derivatives exchange FTX also tasted success as BTC options volume hit $1 million, with $277,8 million traded within a few hours after launching a day before CME started offering BTC options.

Futures offerings also performed really well over the last week, with CME seeing total volumes of 7,245 contracts (36,225 BTC or nearly $313 million), while Bakkt traded $15.2 million which was followed by a steady decline.

CME has certainly become the shining light for how Bitcoin can be integrated into institutional investment platforms. The Bitcoin options offering from CME was also an attempt to meet new demand as well as add to the company’s cryptocurrency offerings. Being one of the very first platforms to offer regulated investment options for bitcoin, the exchange is now reaping the benefits.

Anna Larsen
Anna Larsen has been a Crypto enthusiast since 2016. Fascinated by the technology and its usecases she decided to pursue a career in content creation related to this space. The journey has been exciting ever since.

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