Institutions Getting Out of Bitcoin? Volume & OI Plummeting on Regulated Exchanges
- Bitcoin trading volume on Huobi, OKEx, and Binance jumps ahead of BitMEX
The crypto market is back in the green, adding $23 billion since yesterday. The crypto assets started registered gains yesterday when the price of bitcoin jumped above $6600 on the back of Fed announcing unlimited QE and then today we jumped further to about $6,900.
During the past few weeks, as the digital asset suffered a violent sell-off, the trading volume for bitcoin reached near highs. On Black Thursday, the bitcoin trading volume soared to a 2 year high, beating the second-highest day Nov. 27th.
Now this week, as prices surge, trading volume surged going above $3 billion on top ten exchanges with real volume, as per Messari. In the futures market, Huobi, OKEx, and Binance are leading the pack, in this order, with over $3 billion in volume.
Popular derivatives exchange BitMEX that offers up to 100 leverage has fallen below these three exchanges. However, when it comes to open interest on bitcoin contracts, OKEx and BitMEX are neck to neck with Binance on the lower end.
Bitcoin Trading Volumes Takes a Hit on CME & Bakkt
Coming on the regulated bitcoin futures platforms, volume on CME has fallen below $300 million amidst the coronavirus sell-off. The volume is slightly higher from the lowest level seen earlier this month at just under $90 million.
In mid-February when the price of bitcoin reached 2020 high of $10,500, the volume on the Chicago Mercantile Exchange jumped to multi-month highs at $1.1 billion only to hit the lowest level at since Dec. 21 at $118 million.
The open interest has also declined to just $120 million which was at $338 million on Feb. 14.
Bakkt meanwhile is doing much worse, with the volume going to $14 million for physically and cash-settled bitcoin futures combined. The Intercontinental Exchange's bitcoin trading platform had a record trading volume of $50.1 million on Dec. 18.
This continuous decline can also be seen in open interest which has been plunging. In late Feb, it hit $10 million and went to its lowest on March 19th at just $3.5 million.
Bitcoin options aren’t seeing much activity on regulated exchanges either. For the vast majority of this month, Bakkt recorded zero trading volume while on CME, it has been less than $2 million on the days of much activity while staying below $200k most of the time this month and occasionally even zero.
As venture capitalist Tim Draper also said, the recent sell-off of Bitcoin has been triggered by the institutions who panicked and sold everything they could get their hands on in a flight to the safety of cash.