The surge of 2017 in Bitcoin prices saw the first major step from institutions when CME and Cboe launched Bitcoin futures. Throughout 2018 despite being a bear market we saw numerous developments in the form of Bakkt and Fidelity announcing their plans to enter the space among other projects undergoing the process.
The year 2019 started on a positive note in terms of price and developments as the market registers heightened interest from the institutions.
Whether it is to create their own cryptos such as JP Morgan and Facebook or the involvement of retirement fund into cryptos or universities like Harvard endowments investing in crypto project Blockstack, the institutional interest has only risen in the first quarter of this year.
According to the recent report of Diar, institutional products have moved into growth for 4 months straight, hitting new highs against the US-based crypto exchanges as a percentage of the total trading volume. Institutional products account for 8 percent more than when BTC price hit its peak in December 2017.
Among these institutions, however, Cboe is the biggest loser that reported last month that it won’t update any fresh BTC contracts.
In the meantime, as we reported Grayscale Bitcoin Investment fund (GBTC) as a result of a hike in BTC price last week, the assets under management of the company crossed $1 billion mark. Moreover, the company increased its BTC fund share along with other digital assets except for XRP, that in contrast received a cut.
Though GBTC that is traded on the OTC markets, outperformed Bitcoin itself and registered growth, has lost its dominance. While at the beginning of 2018, GBTC accounted for more than 50 percent of the market share across the three institutional products, now drops down to just under 24 percent.
It is not good for GBTC for sure, but this indicates the entry of more participants in the market that are offering institutional products. The regular cryptocurrency exchanges like Huobi and OKEx have also taken it up to offer digital asset futures options lately that are registering significant trading volume.
One of the most prominent development has been seen from Wall Street as CFTC reported that the start of April saw 315 long BTC Futures contracts opened at CME. This represents an increase of more than 88 percent over the last week as Bitcoin continues to move the needle in the wider financial markets around the world.
In contrast, the short positions fell to just 89 contracts from 241, a decline of over 63 percent in a week. This considerable shift in the market segment also indicates a reversal of trend at least in the short term.
These Bitcoin futures contracts where 1 such contract involves 5 BTC that are big investors with high open interest. And such strong institutional activity can cause the market to react by a good margin. It has been further expected that these investors would work as a catalyst that will trigger the next bull run, just look at some of the btc price predictions.
Mike Novogratz of Galaxy Digital shared his opinion on this where he said, “I don’t see us breaking $10,000 by the end of the year but I think [in] Q1/Q2 if the institutions start coming in, we’ll put in new highs.”
Live Bitcoin (BTC) Price:
1 BTC/USD =$6,871.7612 change ~ 1.89%