In the second quarter, the level of institutional involvement in cryptocurrency through derivatives continued to grow, which is confirmed by the success of the launched Bitcoin microcontract (BTC) from CME Group.
Since its launch on May 3, the number of micro-futures sold on CME has already exceeded 1 million, as announced earlier this week by a derivatives platform based in Chicago. CME CEO Tim McCourt added that the new product is popular with institutional institutions and day traders looking to hedge the price risks of bitcoin spot trading.
The microcontract is denominated in 0.1 BTC, which is one tenth of a bitcoin. For comparison, the base unit of a Bitcoin futures contract on CME is 5 BTC.
Institutional activity was more than we expected, which suggests that we launched the mini version of the Bitcoin contract on time, ” said Brooks Dudley, head of digital assets at ED&F Man Capital Markets.
According to CoinShares, during the last correction, institutions reduced their long-term holdings of bitcoin and other cryptocurrencies, for example, last week, the outflow of funds amounted to $ 79 million.In the case of BTC, recently liquidated coins are actively bought by long-term holders who are still convinced of the long-term prospects. their investments.
The increased activity in the derivatives market suggests that traders are hedging their positions, speculating on the short-term directional movement of Bitcoin, or both. While derivatives trading has increased institutional participation in bitcoin, it has also become a source of stress for spot holders.
The expiration of the $ 6 billion Bitcoin and Ethereum (ETH) contracts on Friday caused serious friction in the market, with some traders expecting extreme volatility.
High volatility was reported in the second half of last week, with BTC falling 13.6% from its peak between June 24 and June 26.
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