- Since 2017, Bitcoin Futures at CME reached $100 billion in traded value.
- Bitcoin Futures are among the most liquid financial derivatives on the market.
CME Bitcoin futures have surpassed $100 billion in total notional value traded since their launch in December 2017.
The CME financial derivative was launched in December 2017 when Bitcoin touched its ATH at around $20,000 USD. At that time exchanges began to open up and introduced Bitcoin-based derivatives. However, not all have been as successful as the CME.
The CME’s futures contracts are cash-settled and have been criticized for manipulating Bitcoin’s price. This was proven by an investigation conducted by Arkane Research, which showed that there was a movement in the BTC price 1.5 days before the futures expired in 75% of the cases. Despite this, as the Director of the CME states, they have become the most liquid financial derivatives in the market:
Our Bitcoin futures have evolved over the last two years and are now one of the most liquid, listed Bitcoin derivatives available globally.
Competition of Bitcoin derivatives
One of CME’s competitors, Bakkt, has also been very successful in launching its physically delivered Bitcoin derivatives. Recently, the derivative offered by Bakkt increased its physical delivery by 1600%. In addition, Bakkt launched cash-settled Bitcoin Futures options to directly compete with the CME product.
As we already reported, Bakkt will have a tough road ahead if it is to overcome the CME. On 13 January this year, CME launched its Bitcoin options and on the first day managed to outperform Bakkt’s trading volume since the launch of its options on 9 December. While CME recorded $2.19 million, Bakkt has traded $1.15 million.
The difference between the trades is significant, it remains to be seen whether the gap between the success of the products of the different exchanges will narrow. For now, it is only evident that there is a high interest in Bitcoin derivatives. The Director of the CME said that the product offered by this institution is still the best valued in the market and that they continue to see a growing interest from investors:
We continue to see strong participation from institutional investors, physical bitcoin traders and other clients who value the transparency, price discovery and risk transfer that only a regulated marketplace like CME Group can offer
Bitcoin trades at $9,285 USD, at the time of publication, and has moved sideways (-0.24%) in the last 24 hours.