By
Chimamanda U. Martha
April 18th, 2024
With a few hours and less than 40 blocks to 2020 Bitcoin halving, CME Group says the record trading activity for its Bitcoin derivatives reflects a strong institutional interest before the halving event.
With miners remaining to solve less than 40 blocks before the 2020 Bitcoin halving, the Chicago Mercantile Exchange sent out one of their recent Bitcoin analyses. According to CME, a strong surge in volumes over the past week is a clear indication that institutional investors are rushing to invest in the asset.
CME is mainly used by institutional and professional investors, who bet on the future price of the asset. The firm noted that around 844 unique accounts have begun trading Bitcoin derivatives since the beginning of the year. It also noted that the figure doubled that which was recorded at the same time last year.
CME said in a statement:
“With Bitcoin halving set to take place on this week, CME Bitcoin futures and options have seen a ramp-up in trading activity ahead of this major event. Large open interest holders in Bitcoin futures reached a record of 62 during the week of April 14, reflecting strong institutional interest”.
What Others Think of CME Bitcoin Futures Recent Report
The exchange statement attracted attention from the crypto community, which is anticipating the event to catalyze a new wave of BTC rally. Ross Middleton, co-founder and CFO of DeversiFI. said:
“Soaring CME bitcoin futures volumes and O1 is evidence of the growing institutional interest in Bitcoin both ahead of the halving and as a broader macro hedge”.
He also added:
“It comes as no surprise that CME’s volume for Bitcoin futures is up because it was one of the easiest ways for legacy firms to gain exposure to Bitcoin”.
According to Brian Wong, the co-founder and chief product officer at BTSE, funds that would not have otherwise been invested in Bitcoin may have had a flagpole moment when hedge fund manager Paul Tudor Jones expressed his intention to allocate a part of his portfolio into Bitcoin.
The average daily volume for CME Bitcoin futures settled at 8,456 contracts year-to-date, a figure that is more than 43% above the same time last year. Besides, CME recorded the total volume for Bitcoin options contracts was up 2,250 from mid-January, with a record of 216 contracts exchanged on May 6.
The firm also reported that open interest in both futures and options was under 9,800 and 555 contracts respectively on May 7. However, the average daily open interest is up 33% in the past year.
How the figures will affect the Bitcoin market price after the reward halving will be based on other critical fundamentals too. The volatility has increased since last Friday, with the asset hovering around $9K at the time of writing.