Institutional Money On The Rise? 250% Yealy Increase In Bitcoin’s CME Futures
‘The average daily volume of Bitcoin futures trading contracts at the Chicago Mercantile Exchange (CME) is up over 250 percent on a year-over-year basis. According to a popular analyst, this is ‘very bullish’ for Bitcoin.
CME Bitcoin Futures Trading Soars
Bitcoin futures contracts traded on CME have seen new records through the month of May. This is true for both open interest and volume.
CME bitcoin futures saw new records in both volume and open interest in May, adding over 200 new trading accounts
Average daily volume finished at more than 13,600 contracts, or ~$515 million in notional USD traded value, up 36% since April and over 250% year-over-year. pic.twitter.com/BUwOFCojVu
— Oliver Isaacs (@oliverzok) June 13, 2019
Data provided by the US Commodity and Futures Trading Commission (CFTC) last month showed that institutional investors had opened 100 percent long Bitcoin futures contracts towards the middle of the month. Looking at the price chart shows us that at around that time, Bitcoin surged from about $7,200 to around $8,300, netting those who longed it a substantial profit.
Another sign of the increasing interest on behalf of institutional investors is the price per share of the Grayscale Bitcoin Investment Trust (GBTC). Back in May, Cryptopotato reported that there is around 37 percent premium in Bitcoin’s price as traded with GBTC compared to regular spot price on traditional cryptocurrency exchanges. GBTC allows institutional investors to gain exposure to the price movement of BTC without having to worry about storing, buying, or managing their private keys. Hence, the higher premium.
‘Very Bullish’ For Bitcoin According to Thomas Lee
Commenting on the above was the popular Bitcoin commentator and chief analyst at Fundstrat Global Advisors.
“This is very bullish as SMEGroup the rise in bitcoin futures volume reflects incremental institutional money.” – Said Lee.
Surely, increasing interest on behalf of institutional investors is a positive sign for Bitcoin and its price. However, it’s also worth noting that things have changed slightly since May.
This month, data from the CFTC shows us that the open short positions on Bitcoin futures contract at CME are more than the long positions. There’s a total of 2,834 contracts going long, and 3,763 going short.
The GBTC premium has also been shrunk down a bit, as one share of the investment fund currently costs $10.45 as opposed to May’s cost of around $11.63 per share.
It’s also worth noting, though, that Bitcoin finally broke the resistance at $8,000 and is currently trading at around $8,100. It will definitely be interesting to see how the market will develop from here and whether the bulls will continue dictating its pace.
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