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Bitcoin Futures, Options, and Open Interest: Crypto Derivatives Break Records After the Halving.

Since the market rout on March 12, otherwise referred to as ‘Black Thursday,’ bitcoin futures and options contracts have seen significant demand. On May 14, CME Group saw the entire number of outstanding derivatives contracts (open interest) touch a high of $142 million. Four days later, CME broke records again. Data from the researchers at Skew.com detailed that CME’s regulated bitcoin options open interest is up 10x this month.

Deribit’s Massive Options Volumes and CME Group’s Regulated Bitcoin Derivatives Markets Touch New Highs.

Ever since the halving on May 11, there have been tons of action when it involves bitcoin-based derivatives products. The research and analysis team from Skew.com publishes daily information about CME’s bitcoin futures and options, products from Bakkt, and a slew of other exchanges that provide crypto derivatives.

For instance, Skew detailed that the exchange Deribit’s bitcoin options open interest had touched $1 billion for the first time in the week. On May 14, CME Group saw $142 million in 10-day combined daily volumes, which is much smaller than Deribit’s but still a milestone for CME. The regulated exchange touched $172 million in total CME BTC options open interest, following the record performance four days prior.

On May 8, CME Group published a blog post about the bitcoin halving and discussed its derivatives products. “The emergence of a futures and options market has created a replacement ecosystem for bitcoin markets, which faces its first supply cut since 2016,” CME Group’s Payal Lakhani wrote at the time. The May 14, open interest breakout for CME Group’s bitcoin options was the first time it’s ever crossed $100 million, Skew noted.

Between Deribit, CME, Bakkt, Okex, and Ledgerx, the volumes pushed “total bitcoin options open interest to a replacement record [of] $1.1 billion,” Skew explained. Additionally, “CME bitcoin futures traded nearly $1 billion,” the researchers disclosed on May 12, 2020.

Bitcoin Halving Fuels Speculation, the Very Driver of Crypto Derivatives Markets:

Even Bakkt’s trade volumes increased after the halving, despite lackluster trading volume months before the event. “Bakkt had a solid halving session with a record volume day in $ notional, $51.8 million bitcoin futures crossed,” Skew tweeted the day after bitcoin’s third halving.

There’s been tons of action with ethereum-based (ETH) derivatives products also. Skew explained on May 21 that “17,500+ Jun20 240 calls traded yesterday on Deribit [at] $10.1 average dollar equivalent price.” When watching Deribit’s ETH options buy/sell ration, Skew said it “reads like overwriting as 76% of liquidity takers were sellers yesterday.”

The market carnage in mid-March was devastating to tons of traders, and lots of derivatives players lost their shirts during massive liquidations. The worth of BTC has strengthened since it dropped to $3,600 per coin on March 12, and cryptocurrency derivatives markets have seen an excellent deal of increased action since then also. Moreover, the third bitcoin halving that happened on May 11, 2020, at 2:30 p.m. ET sparked even more interest in bitcoin-based futures and options contracts depending on the subsequent few months.

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