CME Bitcoin Futures Registers Highest-Ever Volume Traded, Time to Moon or to Get Rekt?
A new record has been set by Chicago Mercantile Exchange (CME) as 18,338 Bitcoin futures contracts were traded. According to CME’s Bitcoin futures contract, 1 BTC contract equals 5 BTC, so this amounts to 91,690 BTC which at $4k per Bitcoin rate means $3.7 million.
This significant surge is supported by the increasing bitcoin trading volume and the rise in Bitcoin price that is attracting the interest of institutional investors. Back in December 2017, CME first launched its futures trading products, about the same time as Cboe and now after about a year, they are having a significant impact on the crypto market.
In a previous article, we shared how futures trading volume were inversely correlated with spot trading volume through last year. At one point, the future trading volume equaled spot trading volumes which could be due to a decline in retail investore interest while institutional interest emerged and increased.
However, in the past few days, as Bitcoin price surged, the futures trading volume is making new records.
The trading volume is seeing a surge which could be nothing or could be everything. Futures trading basically allows the users to make money by either going short or long on an asset. They also have the opportunity to trade with leverage that means they can bet with more money than they already have. These options are attractive to institutional investors as there is an equal opportunity to lose and earn at a heightened level.
Recently, new research found out the Bitcoin futures played a role in the vast decline of Bitcoin price throughout the bear market where it crashed more than 82 percent from its all-time high (ATH) of $20,000.
Now, Javad Afshar, the founder of BlockchainBTM, a crypto ATM operator in the US, in an interview with Block Publisher shared his views on the future of cryptocurrencies. The current trend is bullish, however, according to him, the futures market will prevent it from exponential growth.
“This 2017 phenomena happened because there was no instrument for the speculators to short the market. Now that we have the future markets for bitcoin, speculators can short the market whenever it gets out of hand.”
He further believes the recreation of another bull run like 2017 is improbable rather it would be a gradual process.
“We do not anticipate another wild bull run on bitcoin such as the one that happened in 2017…If the bitcoin price has bottomed at around $3,000 and assuming it’s in the bull market, the price will only go up gradually.”
Though the current trend is bullish, it is possible after seeing a surge to about $4,400, it could take a hit. However, that is all yet to be seen!