The Bitcoin futures market is reawakening as the price boost at the end of October to over $10,000, saw the pioneer cryptocurrency grow by a mammoth 42% in less than 24 hours. Bakkt futures by the Intercontinental exchange (ICE) have followed suit with the number of open interest (OI) contracts reaching an all-time high value of $1.26 million as of Nov. 4. Furthermore, institutional grade futures from the Chicago Mercantile Exchange (CME) are growing in popularity as the number of OI contracts rose 383% since August.
Institutional Interest in BTC Futures Grows
Institutional interest cannot be exclusively pinned to President Xi Jinping’s speech endorsing blockchain as the value has kept rising since then. Institutional interest in CME Futures saw a spike from 2,873 contracts in Q3 2018 to 5169 open contracts as of Nov. 4. Long BTC futures, in particular, have had a rocky ride through the past 3 months, starting at 180 contracts at the start of August and peaking at 805 contracts in September as BTC’s price dropped below $10,000 USD from its July highs.
As BTC struggled through September to cross the resistance at $10K, institutional interest in futures died down, turning long contracts to shorts – number of OI on BTC longs dropped to -290 BTC on September 24th. However, October presented a revamp in institutional interest as the value of long Bitcoin futures open interest on CME grew by 450% as the volatility of BTC spot price dropped to 6 month lows of 2% on Oct. 22.
Image: Skew Markets
November has started on an even sweeter note as both CME and Bakkt futures experienced increased interest from large investors. Bakkt, a widely proclaimed “failure” is finally showing signals of success reaching almost $10 million in daily trades for physically settled BTC futures.