Bitcoin Price AnalysisPrice Analysis

Outstanding CME Bitcoin Futures Positions Smashes New Highs

Hedgers and bettors are turning to the CME Group’s first-mover bitcoin futures offering like never before.

According to the U.S. Commodity Futures Trading Commission (CFTC), the number of outstanding CME bitcoin futures contracts reached just below 5,200 during the weeklong span from May 27th to June 3rd — a new record for the offering.

In the case of bitcoin, futures are used to facilitate bets on what the bitcoin price will be at a specified time. For example, institutions can use these contracts to speculate on bitcoin, or miners can use them as a type of insurance to protect against price drops, e.g. in the way a corn farmer might short via corn futures to offset the risk of a drought.

CME Futures

CME Group, one of the most popular marketplaces in the world, first made waves in the cryptoeconomy back in December 2017 when the company received CFTC approval to launch a bitcoin futures product. It was the inaugural approval for such a product, not only in the U.S. but across the globe.

Since then, CME Group has maintained its position as the go-to source for bitcoin futures, and more institutional traders have seemingly taken notice if the firm’s fresh volume milestone is any indication.

Notably, CME Group’s financial exchange competitor Cboe Global Markets did not renew its own bitcoin futures offering back in March 2019, when Cboe Futures Exchange announced to traders it was reassessing its approach to “digital asset derivatives.”

However, that decision largely seems to have come down to volume — since last March, trade volume around CME’s bitcoin futures considerably and consistently outpaced the volume around the Cboe bitcoin futures product.

After Cboe’s recoil, a CME Group spokesperson said the company planned “no changes” to its own BTC contract. A few months later, and with volume booming, it’s even easier to see why.

Activity on the Rise Around Bitcoin, Crypto

As CME’s bitcoin futures are becoming more popular, activity in the Bitcoin space is also growing.

For example, the number of unique addresses used on the Bitcoin blockchain has seen an uptrend so far this year, as has the average transaction value of bitcoin payments. Undoubtedly, some of the upticking has come from traders snapping to attention after the bitcoin price gained 125 percent over the last three months.

To be sure, there are loads of moving pieces in the cryptoeconomy right now, and the activity has led to a stirring effect. The U.S. Internal Revenue Service has promised new cryptocurrency taxation guidance. Facebook’s imminently entering the ecosystem with a “basketcoin” token. 2020 presidential candidates are starting to publicly stake out pro-Bitcoin and pro-blockchain positions. There’s a general sense that things are revving up across the entirety of the cryptocurrency arena, particularly in its major nooks.

And things are set to get bigger still, as institutionally-focused plays like Fidelity Digital Assets, ErisX, and Bakkt have yet to reach full strength. Don’t sleep on the bitcoin futures product coming from Nasdaq either, as well as the first ether (ETH) futures contracts arriving in general.

In CFTC News: Commission in Talks on GlobalCoin

In the U.S., the CFTC has asserted its regulatory purview over top cryptocurrencies like bitcoin and ether in arguing these assets are digital commodities. It’s per that reasoning the regulator greenlighted BTC futures in America in the first place.

With that mantle as a backdrop, Facebook has reportedly reached out to the Commission and has had “very early” conversations on the social media giant’s forthcoming GlobalCoin token.

If nothing else, the revelation indicates that Facebook is powering full steam ahead on trying to bring its token to market. Since the project is said to be focused on stablecoin-like functionalities, , it remains to be seen whether the CFTC will slot GlobalCoin as a commodity, however.


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