CME Bitcoin Futures Now Average $370 Million In Trading Per Day

Discussion in 'Cryptocurrencies' started by johnarb, Sep 9, 2019.

  1. johnarb


    [What's going to be really exciting is the NYSE/ICE Bakkt exchange that will open in 2 weeks - Sept 23, 2019, that is a bitcoin-settled futures, with 1-day futures offering, which is really an answer to the much-talked about "overwhelming interest/demand" from Institutional Investors.

    We will finally see how real that demand is. 1-day futures offering with bitcoin delivery is just another way to say, Institutional Investors buying bitcoin and having a trusted Custodial entity to hold the digital asset Bitcoin -imho]
    Bitcoin futures trading activity at CME is up significantly since this time last year, according to statements from CME Group managing director Tim McCourt. (Photo by Scott Olson/Getty Images)

    [Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

    The Chicago Mercantile Exchange (CME) Group posted record numbers in 2019 for its bitcoin futures trading, showing renewed interest in crypto's largest asset, with current trading activity up significantly from August last year.

    Bitcoin has tallied a dramatic rise in price since April 2019, providing fresh optimism, compared to the doldrums the asset faced in the months prior to April. With renewed price vigor often comes positivity, news headlines and public attention.

    Traders usually become increasingly interested under conditions such as these, as shown by CME's prosperity in the bitcoin trading department in 2019. "Year-to-date, bitcoin futures are averaging 7,237 contracts per day, which is a 132% increase from the same period last year," CME Group managing director and global head of equity products and alternative investments Tim McCourt said to me in an August 23 email.

    In December 2017, CME and the Chicago Board Options Exchange (CBOE) launched their respective cash-settled bitcoin futures trading products as one of the first major moves to bring a bitcoin-based (or, in this case, a bitcoin price-based) trading product to the mainstream financial world. At the tail end of a difficult bitcoin bear market in March 2019, however, CoinDesk reported that CBOE would discontinue its bitcoin futures trading activities. CME, on the other hand, pressed onward with its bitcoin futures trading.

    From January to March 2019, bitcoin floundered between $3,400 and $4,200, according to's Coinbase bitcoin price chart. On April 2, price shot from $4,200 up past $5,000 in a strong single-day price move. By the end of May, crypto's largest asset found itself above the $9,000 mark. In June, bitcoin spiked to nearly $13,900 in price, and has since found itself somewhat range-bound between $13,200 and $9,000.


    "This is an exciting time for bitcoin futures, as well as for cryptocurrency assets in general," McCourt said.

    "There is a lot of broad investor interest in cryptocurrency, as well as growing interest in a variety of applications for cryptocurrencies and blockchain technology. It will be interesting to see how this new market continues to grow and scale. For us at CME Group, a major focus is education, and making sure our customers have all the tools they need to make solid strategic decisions around crypto."

    In May 2019, CME tallied its most successful month of bitcoin futures trading since the product's inception in 2017, "trading an average of more than 13,600 contracts each day, equal to ~$515 million in notional value or 68K equivalent bitcoins," McCourt explained. "On May 13, BTC traded a record single-day volume of 33,677 contracts (168K equivalent bitcoin or $1.3B notional)," he added.

    As bitcoin's slump throughout 2018 and part of 2019 took its toll on the market, CME never contemplated discontinuing its bitcoin futures trading products, McCourt said. "It’s important to remember that CME Group is a neutral marketplace," he explained. "Our role is to help bitcoin market participants manage their risk, regardless of whether the underlying price goes up or down," he said. "We’re pleased with the growth of CME Group bitcoin futures so far."

    Regarding the upcoming days, McCourt did not provide any specifics on CME's plans, or lack thereof, for any potential additional bitcoin trading products.

    "We’re constantly talking to our clients and market users about new products and solutions that will help them to manage their price risk. We launched bitcoin futures in 2017 in response to client demand, and any decision to launch new crypto products will similarly be driven by customer feedback."
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  2. MattZ

    MattZ Sponsor

    Tood bad that the CBOE canceled their contract. It was a bit more reasonable in leverage (in my opinion).
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  3. maxinger


    I don't see any significant increase in volume.
    past few weeks, ave volume is around 4K per day.

    perhaps contract size should be shrinked to improve liquidity.
    MattZ likes this.
  4. johnarb


    Yea, they should offer lower leverage products. The article/CME points to $ daily volume which is skewed by the higher price of bitcoin compared to the beginning of the year when it was less than half of current $10K price/bitcoin

    ~7000x5btc per contract = ~$370M