Bakkt’s Bitcoin Futures Settled in Bitcoin Overtakes Cash Settlement
According to the provider of real-time data analytics for Bitcoin and Ether derivatives, Skew, the latest data on May 26 shows that Bakkt’s physically-settled Bitcoin Futures produced $34m, cash-settled Bitcoin Futures produced $9.3m and total open interest was $7.6m. Likewise, Bakkt’s physically-settled BTC Futures recorded a daily volume of $43m on the same day.
The data shows that the tide has turned against cash settlement. Before May 26, most of the futures were settled in fiat, thereby recording larger volumes. Cash-settled Bitcoin Futures produced the largest volume throughout March and April, as volatility showed that investors desired cash.
On May 29, there will be an expiry of a fifty percent open interest at non-exchange futures provider CME Group. Some participants in the space believe that such settlement dates have the tendency to consolidate bearish pressure on Bitcoin in the short term.
Open interest for CME Group’s Bitcoin futures attained a new lifetime high in the first week of May, according to cryptocurrency analysis firm Arcane Research on May 7. Nevertheless, a gap opened up in the CME order book over the weekend but got filled on May 27, and this has been a regular trend since the time Bitcoin futures started trading in 2017. Bitcoin reacted to the occurrence, as BTC/USD pair immediately moved from $8.9k to $9.2k on the day.
Professional traders just pushed the Open Interest on CME to $399 million yesterday, a new all-time high. Still, the daily trading volume is not seeing the same growth, indicating less trading-driven and more exposure-driven activity on CME. (Source: @skewdotcom) pic.twitter.com/UKY9dVKAF7
— Arcane Research (@ArcaneResearch) May 7, 2020
The cryptocurrency space has been experiencing some attention in recent weeks regarding institutional Bitcoin investment, as macro investor Paul Tudor Jones revealed that he had bought Bitcoin.
Tudor described cash as a “wasting asset in your hand” because of inflation, noting that he now kept up to 2 percent of his net assets in Bitcoin, thereby putting institutional Bitcoin investment in spotlight. Thereafter, several individuals expressed their thoughts that sooner or later, other people will have to follow his clear endorsement of Bitcoin.