CME micro bitcoin futures pass 1 million as institutions increase exposure

Institutional investor exposure to cryptocurrencies via derivatives continued to grow in the second quarter as CME Group’s newly launched micro-bitcoin contract attracted significant interest over the past two years.

Since its inception on May 3, the CME Micro Bitcoin Futures have exceeded 1 million contracts. The new product is popular with institutions and day traders who want to hedge against the price of Bitcoin on their spot markets, said CEO Tim McCourt.

The micro contract is worth 0.1 bitcoin, much smaller than CME’s main 5 bitcoin futures contract.

Brooks Dudley, Global Head of Digital Assets at ED&F Man Capital Markets, said:

“We saw more institutional volume than expected, which indicates the right time for a smaller Bitcoin contract.”

According to CoinShares data, institutional investors reduced their long-term exposure to Bitcoin and other cryptocurrencies in the recent correction, with total outflows of $ 79 million last week. In the case of Bitcoin, newly liquidated coins are held by long-term holders who still believe in the long-term prospects of the investment.

The momentum in the derivatives market suggests that traders are hedging their positions, speculating on bitcoin’s short-term directional move, or both. While derivatives trading has increased institutional investor exposure to Bitcoin, it has also affected spot market holders. How Bitcoin magazine reported that the $ 6 billion drop in Bitcoin and Ether on Friday created significant conflict in the market, with some traders expecting extreme volatility.

Bitcoin price has mostly traded between $ 30,000 and $ 35,000 last week | Source: Trqadingview

A high level of volatility was reported in the second half of the week, with Bitcoin price falling between Jan.

Teacher

According to Cointelegraph

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