The number of futures contracts negotiated on Bakkt reached 11,509, one for each BTC traded. The cryptocurrency recently broke the USD 11,000 mark.
The increase in price that Bitcoin (BTC) has experienced in recent days is boosting cryptocurrency-related futures and open interest markets. The Bakkt and Chicago Mercantile Exchange (CME) markets are reporting new caps on the contracts negotiated and amounts traded.
Bakkt, a subsidiary of the Intercontinental Exchange (ICE), is the company behind the New York Stock Exchange. It recently reported that the daily trading volume of Bitcoin futures contracts reached 11,509, one for each Bitcoin traded in the institutional market.
The figure represented around 122 million, considering that the price of BTC climbed to USD 11,200 per unit. The exchange indicated that it was an 85% increase since its “last record day”.
According to data from Skew, the 30-day “physical settlement” of Bitcoin (direct reception of the asset, not in fiat money such as the US dollar) on Bakkt maintained a trading volume below USD 40 million, for the most of July. However, the momentum in the price of the first cryptocurrency would be boosting Bitcoin futures contracts in this corporate market.
Taking into account the daily average figure recorded in July, this would be around USD 23 million for direct futures contracts settled in BTC, that is, with the direct handling of the cryptocurrency. For futures contracts settled in cash, the figure is USD 10.3 million.
Unlike what happens with cryptocurrency exchanges, P2P services, and decentralized platforms, on which the traded amounts can exceed USD 2 billion in just hours, the amounts of Bitcoin traded in traditional markets are relatively low.
The fluctuations in trading volumes could indicate that institutional investors remain outside of the trading with the cryptocurrency. It is also possible that investors are keeping Bitcoin futures contracts in their portfolio, but with a minimal percentage, compared to stocks or bonds.
There is also a possibility that investors prefer to trade directly with Bitcoin on Coinbase or Binance. Another scenario is that they are agreeing to Bitcoin futures contracts in other markets.
Bitcoin and Open Interest
As for open interest in Bitcoin futures contracts settled in cash on CME, the exchange reached a cap of USD 724 million, a new high for the market.
The recent rise was also reflected in the average daily trading volume for CME Bitcoin futures contracts with an increase to more than USD 1.3 billion, a figure 10 times higher than that traded on Bakkt.
Open interest is the volume of open positions in a futures contract at a certain point in time. In other words, traders keep their positions unsettled as they believe that the price could change in their favor.
According to data from CoinMarketCap, the price of Bitcoin at the time of writing this article was USD 11,040 per unit, showing an advance of 17.6% for the last seven days.
By Alexander Salazar
