New Institutional Money in CME Bitcoin Futures Hits Peak Since Launch


The open interest on Bitcoin futures has hit an all-time since they were launched during the peak of the 2017 bull run.

On May 14th, OI jumped to 10,792, coming at a total of 53,960 BTC, a new peak. This OI is more than double the 2019 high of 26,260 BTC in July.

According to Investopedia, open interest is the total number of outstanding derivatives contracts, not settled. Increasing open interest meanwhile represents new money coming into the market.

The open interest on CME bitcoin futures has been increasing for over the past month and made a new ATH on May 19 at $532 million.

Trading volume has also jumped in May, the average daily volume is keeping around $500 million, hitting $914 million on May 11, the day of halving.

A year back, in May 2019, the average trading volume climbed to 68020 BTC contracts and jumped $1 billion in notional volume as well, the month that saw the price of bitcoin jumping over 45%.

“Bitcoin adoption continues,” tweeted Gabor Gurbaccs, digital asset strategist at VanEck. “More regulated ways to go long for institutions that otherwise can’t get exposure.”

May is expected to be a record month because of the ongoing surge in activity the regulated platform is seeing after macro investor Paul Tudor Jones bought bitcoin via CME.

The billionaire hedge fund investor called bitcoin the “fastest horse” and the best bet to win “The Great Monetary Inflation.” Tudor Jones also revealed that 1 to 2% of his assets are in the “inflation hedge.”

CME’s “Exchange for Physical” BTC options

Recently, CME global head of index and alternative investment products, Tim McCourt shared that traders prefer cash-settled bitcoin products over physical-settled ones.

“So far, clients have expressed a clear preference and priority for a cash-settled product,” McCourt told Cointelegraph.

The introduction of CME bitcoin futures just about a year and a half ago helped investors better manage the price risk. Currently, the platform is seeing an average of 42,500 BTC traded per day, he said.

However, options that allow one to settle long positions with actual bitcoin is also gaining interest from traders, highlighted Jeff Dorman, CIO at Arca.

CME’s little known “Exchange for Physical” option makes it possible to settle in actual bitcoin and ahead of the April 2020 expiry, 284 bitcoin contracts were interested in this trade type.

Interestingly, the OI on CME’s bitcoin options is also making records, hitting $174 million on May 19, as per Skew Markets. But it is nowhere near Deribit, the leader in the options market whose open interest touched $1bln for the first time.

CME launched its bitcoin options product in January this year and since then it has traded 5,000 of these contracts, 25,000 BTC in total.

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