There were high expectations regarding Institutional Investors finding Bitcoin futures trading as a good investment. However, a survey conducted by Binance research revealed that the cryptocurrency market lacks investor confidence due to multiple reasons.
Fears regarding Crypto
Problems with Custody, liquidity, and regulations were the top three concerns from institutional investors jumping into crypto. Bakkt has been trying to bait institutional investors with a variety of investment options. The futures trading platform for physically settled Bitcoin contracts launched earlier in September.
After a slow start, it soon picked up the pace with 1741 BTC ($15.5 million) worth of contracts traded in one day back in November. The daily volume registered by Bakkt has been growing ever since.
Institutions like Bakkt are playing a vital role in the growth of the crypto industry as it has been providing investors a safer and more regulatory compliant way of investing in cryptocurrencies without facing most of the risks involved in the space.
Are options trading the next big thing?
Another 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.
The latest in the market to start Bitcoin options trading is cryptocurrency derivatives exchange FTX. The company’s CEO Sam Bankman-Fried announced in a recent tweet that BTC options were listed on the trading platform. As of now, only Bitcoin-based options are supported on the platform.
Just a few hours after the announcement, the BTC options volume hit $1 million, with $277,8 million traded over the last 24 hours. According to the cryptocurrency data website CoinGecko, FTX was in the top eight crypto-asset exchanges based on volume.
“In response to growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure, CME Group will launch options on Bitcoin futures (BTC) on January 13, 2020.”
Analysts from JPMorgan predicted that the existing CME Bitcoin Futures had sparked a lot of investor interest towards the company’s options contract. They said:
“This unusually strong activity over the past few days likely reflects the high anticipation among market participants of the option contract.”
It is not only FTX and CME on the race against time. There are others that have also indicated that they would launch options trading soon. One of them is the Malta-based cryptocurrency exchange Okex. The company also introduced the BTC/USD Options market on Thursday, January 9, 2020.
Despite Bitcoin ETF not being available at the moment, Futures and Options trading is attracting a lot of attention. This provides a safe space for more institutional investors and contributes to the growth of the industry.
What’s more interesting is the fact that all these platforms are going live in a matter of days from each other. This shows how popular cryptocurrencies have become an investment option even for those who are not in contact with this space directly.
Cryptocurrencies are increasingly gaining popularity, and there are more traders who want to benefit from its volatility. As more financial institutions start providing customers with investment options related to cryptocurrencies, it could be the next big BTC investment boom.