TradeBlock Report Shows Bitcoin Futures Trading Volumes Were Inversely Correlated with Spot Trading Volumes

In a recent report released by Trade Block on February 7, compares Bitcoin (BTC) futures and spot trading volumes. Back in 2017, the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE), launched Bitcoin futures products to the market.

According to their report, Bitcoin futures trading volume has fallen since they reached a peak in the summer of 2018. At the same time, the results show that the total bitcoin futures trading volume at the CME and CBoea reached parity with the five largest U.S. crypto exchanges.

One of the things that the report mentions is that trading volumes at the CME surpass the volumes registered by the Cboe. Although there is no explanation to why this happened, the CME had larger trading volumes than the Cboe since January 2018, more than a year ago.

In 2018, trading platforms have seen their trading volume fall following the bear trend in the cryptocurrency market. As per the report, spot trading volume fell approximately 85% between January 2018 and October 2018.

In November and December, volumes started to rise once again. One of the main reasons behind this increase is related to the hard fork experienced by Bitcoin Cash (BCH). Just before the hard fork, Bitcoin was traded around $6,000 and then it dropped down to $3,250 in December 2018.

The increase in trading volume is also related to retail investors leaving the market due to the falling prices of virtual currencies. The report went on explaining that this is in line with falling search engine trends for Bitcoin and cryptocurrencies that were usually used to measure the sentiment in the market.

The researchers mention that peak notional trading volume in Bitcoin futures contractsoccured in the months of July and August before the decline started. December 2018 registered the lowest monthly trading activity in Bitcoin futures since these products were launched to the market.

The report reads as follows:

“While bitcoin futures trading volume initially saw significant growth each month following inception, spot trading activity was steadily declining during this same time period. Given these divergent trends, total future trading volumes across CME and Cboea reached near parity with total spot trading volume across five of the largest US accessible digital currency exchanges.”

Now, it will be interesting to see how these trends will continue in 2019 and how they will be related one to the other. It is also worth mentioning that there are several companies that want to launch bitcoin futures platforms, one of them is Bakkt, which was founded by the Intercontinental Exchange (ICE).

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