Bitcoin Extends Rally as Trading Volume for CME Futures Hits Three-Week High

Trading activity for bitcoin (BTC) futures listed on the Chicago Mercantile Exchange (CME) has picked up pace as bitcoin has extended its recent rally to levels above $7,200.

CME traded $347 million worth of futures contracts Thursday – the highest since March 16. On that day, futures witnessed a trading volume of $414 million, according to data provided by research firm Skew.

Thursday’s spike in trading volumes marked a 294
percent rise from the preceding day’s tally of $88 million.

Open interest or open positions on futures ticked higher to $170 million on Thursday to hit the highest level since March 11. While open interest denotes the number of contracts that are open or active, volumes represent the number of contracts traded during a specific period.

Institutional interest in the derivatives space, which began heating up in the fourth quarter of 2019, surged in the first six weeks of this year. For instance, daily trading volume for bitcoin futures on CME rose from $176 million on Jan. 2 to a record high of $1.1 billion on Feb. 18.

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By March 6, however, volumes had dropped to $88
million. Open interest also declined from the record high of $338 million to
$113 million in the five weeks to March 20.

Other exchanges also saw a similar drop in the
activity. The aggregate or total open interest in futures listed across the
globe fell below $2 billion in March, having hit highs above $5 billion in
mid-February, according to Skew data.

The sudden slowdown in the activity coincided with the global dash for fiat, primarily U.S. dollars, triggered by the coronavirus-led slide in the global equity markets. Institutions likely took a break from the crypto derivatives market amid the crisis.

As CME is again witnessing higher numbers, activity on other exchanges, too, is picking up, as evidenced by the rise in aggregate daily volumes to $19 billion, the highest since March…

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