Latest Numbers Show Bitcoin Derivatives Preferred by Institutional Investors
The Crypto Fear and Greed Index (CFGI) shows that retails investors are extremely fearful of the massive downturn the crypto market has taken over the past week, with Mark Dow, the former economist for the US Treasury and International Monetary Fund saying on Twitter that the Bitcoin is dying during the period of the sell-off. However, the incoming data speaks otherwise.
#Bitcoin is dying.
— Dow (@mark_dow) November 21, 2019
US Regulated BTC Futures Markets Had their Volumes Increasing
While the Bitcoin was going under $8,000, US regulated BTC futures markets were witnessing their volumes going through the roof. The high demand for crypto derivatives is indicating more and more institutional investors are interested in such projects, even if the market volatility is at high levels.
The market value of Bitcoin took a big hit over the past 2 weeks, with the coin going from the high $9,100 trade value on November 11 to the low $6,600 on November 25. While this happened, long and short positions valued at almost $1 billion were liquidated on BitMEX, the crypto trading platform for derivatives based in Seychelles. In spite of the huge number of retail investors that got wrecked on BitMEX, many institutional investors didn’t.
Bakkt and CME Saw Their Trading Volume Increasing Too
On November 22, the Bitcoin futures exchange Bakkt has also seen its trading volume reaching an all-time high. According to the International Exchange (ICE), there were 2,728 monthly BTC futures contracts traded, at the value of $20.3 million. This raise in volume is 66% of the increase in the before 24-hour time period and 30% higher than Bakkt’s all-time high from November 9, which was 1,756 BTC.
The same thing happened with the Chicago Mercantile Exchange (CME), that reported a $424 million aggregate trading volume on Friday and registered $400 million on Monday, recording its highest trading volume since September.
While Institutional Investors Pour, Retail Ones Are Fleeing
Institutional investors seem to enjoy the action around the Bitcoin price. As a matter of fact, Grayscale Investment’s Bitcoin Trust is showing that more capital is flowing into the coin. As the most trusted authority to provide data on digital currencies and crypto asset management, Grayscale has presented in its quarterly report that the institutional capital of $171.7 has flown into the Bitcoin Trust, making this quarter the heaviest in the product’s history of 6 years.
Since it has received many requests from accredited investors, Grayscale has decided to file a Form 10 registration statement with the US Securities and Exchange Commission (SEC), for its Bitcoin Trust project. If it gets approval, Grayscale becomes a SEC-reporting company and the first crypto investment entity to achieve this. At the same time, retail investors seem to be fleeing.
In October, addresses with balances equal or greater than 0.1BTC have significantly dropped in numbers, which means average people aren’t too interested in the crypto world. However, the institutional interest is proving the industry is maturing, not to mention more countries are developing regulations for financial institutions to be able to trade using cryptocurrencies.