CBOE Breaks Records with Bitcoin Futures
Last week, two of the big markets for the Bitcoin futures contracts saw a massive hike in trading volumes. CBOE experienced its highest ever volumes for the cryptocurrency’s futures contracts since they were launched with much fanfare in December last year. CME’s trading volumes also spiked hugely, though not as much as CBOE’s.
Trading Details
According to the data, 19,000 Bitcoin futures contracts with various expiry dates were traded on the CBOE exchange on Wednesday. Of these, about 18,210 contracts traded were for the expiry in May, 703 contracts traded were for mid-June expiration with the other 87 were traded for the July expiry cycle. No contracts for the August cycle had been traded, though.
According to the Senior Instructor of the CBOE Options Institute, Kevin Davitt, the daily average volume (DAV) of trade in Bitcoin futures contracts since it was launched has been about 6,000. However, on Wednesday, that number more than tripled. Wednesday was the exception to the trading that took place for XBT Bitcoin Futures.
On Monday, there were 3,881 futures traded, which went up to about 6,653 on Tuesday. On Thursday, trading volume was at 5,634 and Friday saw similar volumes being traded.
CME also saw similarly high volumes on Wednesday’s trading. The exchange’s trading volume for the Bitcoin Futures Contracts shot up to more than double of the DAV. However, unlike CBOE, most of the trading that took place was for the April expiry cycle.
Why the Sudden Spike
Last week’s spike in Bitcoin Futures Contracts trading broke its January record of 15,500 contracts traded. The January trading spike was easily attributed to the fact that that was the first ever expiry of contracts related to Bitcoin futures.
Last week’s activity, on the other hand, is actually better news, since it indicates that markets are genuinely becoming more interested in trading in Bitcoin Futures Contracts now.
CBOE had also recently written a letter to the Commodity Futures Trading Commission (CFTC), proposing a rule amendment that would allow the exchange to lower the minimum increment price on its Bitcoin Futures Contracts from $10 to $5 dollars, reasoning that it would attract more investors. Some analysts feel that this could also have contributed to the spike in trading last week.
According to Kevin Devitt, analysts would be monitoring trading to see if this spike in trading volume last week was an aberration or is it an indication that more institutional investors are gravitating towards cryptocurrency trading. The indicator will be whether the overall bullish sentiment towards Bitcoin Futures Trading continues after this spike.