Institutional exposure to cryptocurrencies through derivatives continued to increase in the second quarter, as CME Groups recently launched Bitcoin MicroContract (BTC), which saw significant gains in the first two months of trading.

Since its launch on May 3, CME’s Micro Bitcoin futures contracts have exceeded one million contracts sold, as announced earlier this week by the Chicago derivatives market. CME CEO Tim McCourt said that the new product is popular with organizations and day traders who want to lock in the risk of the spot bitcoin price.

A micro lot of 0.1 BTC is equal to one tenth of the size of a bitcoin. By comparison, the base unit of CME Bitcoin futures contracts is 5 BTC.

“We have seen more institutional size than we expected, which indicates that the time is right for a small Bitcoin contract,” said Brooks Dudley, head of digital assets at ED&F Man Capital Markets.

On the topic: “Bitcoin will grow to $160,000 this year,” says Celsius CEO.

Institutions reduced their long-term exposure to bitcoin and other cryptocurrencies during the latest correction, according to CoinShares, by $79 million in outflows last week. In the case of BTC, the recently liquidated coins are collected by long-term holders who are still convinced of the long-term investment prospects.

Increased activity in the derivatives market indicates that traders are securing their positions by speculating on Bitcoin’s short-term directional movement or both. While derivatives trading has increased institutional exposure to Bitcoin, it has also become a source of pressure for fraudsters. As Cointelegraph reported, the $6 billion influx of Bitcoin and Ether (ETH) on Friday caused intense market friction, with some traders anticipating extreme volatility.

The price of Bitcoin last week was mostly between $30K and $35,000. Source: Cointelegraph
High volatility was reported in the second half of the week, with the price of BTC dropping 13.6% from peak to low between June 24 and 26.

Source: CoinTelegraph

LEAVE A REPLY