The new price action experienced by Bitcoin (BTC) earlier this week has attracted the attention of many investors in the market. On April 4, the Chicago Mercantile Exchange (CME), announced that it as broken a new record in Bitcoin futures trading volume.
In a recent tweet uploaded by the Chicago Mercantile Exchange (CME), they have traded 112,700 Bitcoin, the equivalent to $563 million. This is a similar trading volume as registered by several other cryptocurrency exchanges in the market.
CME Bitcoin futures had a record trading day on April 4, hitting an all-time high volume of over 22.5K contracts (112.7K equivalent bitcoin), surpassing previous record of over 18.3K (64.3K equivalent bitcoin) on February 19. More #Bitcoin futures. $BTC_F https://t.co/kWYK203apA pic.twitter.com/CX5nF8dXyv
— CMEGroup (@CMEGroup) April 5, 2019
In general, retail investors and holders tend not to use Bitcoin futures since the smallest contract that the CME offers is just 5 Bitcoins and because retail investors tend to use platforms such as exchanges. At the same time, a significant portion of the trading volume of the CME comes from Wall Street. In general, wealthier, traditional and larger investors tend to use futures.
It is worth mentioning that several investors outside crypto believe that virtual currencies are a scam. However, this is not like that and the market is evolving into a more mature industry as time passes. Now, that half a billion dollars are being traded on the CME, there are several individuals that are paying close attention to what is happening in the market.
A higher level of trading volume could be very positive for digital assets since the U.S. Securities and Exchange Commission (SEC) could consider the approval of an exchange-traded fund (ETF). This increase in the liquidity of the Bitcoin futures market could help investors protect themselves against price drops in the future.
Meanwhile, in the traditional Bitcoin spot market, there is currently a controversy regarding trading volumes and how exchanges could be participating in wash trading activities. There are several platforms that have experienced a sudden increase in their trading volume because there are users that could be performing wash trading. This increases the interest of other users to start trading in these markets due to the “higher” liquidity they display. However, these are not respected platforms.
Changpeng Zhao, the CEO of Binance, one of the most popular exchanges in the crypto space, said that things are “getting a little out of hand.”
This is getting a little out of hand. The exchanges above fail to realize:
CREDIBILITY is the most important asset for any exchange!
If an exchange fakes their volumes, would you trust them with your funds? pic.twitter.com/LAizwYAJoC
— CZ Binance (@cz_binance) April 6, 2019
According to a recent report released by Bitwise, 95% of the exchanges in CoinMarketCap have faked their volumes to attract a larger number of traders. Meanwhile, the CME is registering a larger number of traders that want to trade Bitcoin.