In terms of anticipation, Bitcoin futures have been high up the list over the last few years. It began with CEM, a traditional derivatives trading platform entering the cryptocurrency space, and has culminated with the likes of Bakkt coming into it, along with new CME options.
Even the cryptocurrency companies such as Binance, BitMEX and Huobi have been gaining traction with their futures trading offerings. Allowing investors to essentially bet on the movement of Bitcoin has been attractive to institutional investors as it allows them to keep their hands clean of coins, but there is also high leveraging to profit off.
With all this excitement, CME and Bakkt as the two most-talked-about institutional crypto futures platforms, have been working hard to try and capture this new market but it appears that even with Bakkt’s innovative physically settled contracts, CME is king.
The Chicago company opened up Bitcoin futures option on Monday this week in response to the high demand they were seeing through 2019 and within one day the company was able to blow away Bakkt’s own first-day trading volume.
It was estimated that 55 contracts went through on the opening day of CME’s Bitcoin futures options, this equates to $2.3 million. This figure is still relatively small considering that as much as $20 billion was traded across a broad spectrum of futures offers on one day last week.
However, as an opening show, this is rather impressive especially when considering that Bakkt’s highly anticipated opening day for the physically-settled contracts failed to excite. On Bakkt’s opening day, 71 contracts – for 71 BTC – were traded and the price back then was just under $10,000.
However, the 55 contracts in the CME options equates to 273 BTC being traded as each contract is 5 BTC. the added interest may well be coming from the fact that CME has already proven its worth over two years of crypto derivative trading, and that the demand was always high from within.
Concerns over derivative trading
The growth of traditional forms of trading entering the Bitcoin space has often been associated with a maturing market. This is why CME and Bakkt’s entry was welcomed and the Bitcoin market mostly responded well. Bitcoin is up to $8,500 after spiking on the successful options launch.
However, there are also those who feel that this kind of trading brings in a new crop of clueless speculative investors who could be damaging the market and undermining the true scope of the technology and the financial side of things. In fact, it has been suggested that derivatives and leverage trading could be part of the fake volume numbers