The Bitcoin bull-run coupled with the competitor-less Bitcoin Futures market saw the Chicago Mercantile Exchange’s [CME] Bitcoin Futures surge by a whopping 950 percent over the past five days of the month.
As per the exchange’s data, the CME saw a massive 22,542 contracts traded on its exchange on April 4, with each contract accounting for 5 BTC. This would mean that over $560 million, given Bitcoin’s price at over $5,000, was traded in the form of Bitcoin Futures in the period.
On April 1, Monday, prior to Bitcoin’s $5,000 ascendance, the number of contracts traded was a mere 2,162. A day later, when BTC rose by 15 percent and the collective market added over $20 billion overnight, the contracts increased by 455.73 percent to total 12,015 contracts.
An additional 5,050 contracts were traded on Wednesday. Bitcoin’s price continued to hover close to, and at times over $5,000, leading many to believe that this pump was not a temporary shock and hence the contracts, on April 4, reached 22,542, a massive 942.64 percent higher than the amount at the beginning of the month.
The Bitcoin futures market, as a whole, was going through a tumultuous time since the crypto-winter set in during the close of 2018. February 2019, saw the top exchanges, CBOE and CME record their lowest Bitcoin futures trading volume to date. After a successful early-2018, the derivatives market seemed to lose steam, as the price-decline began and eclipsed in February.
March 2019 also saw CBOE pull out of the XBT race by delisting their Bitcoin Futures for the same month. This exit was due to the falling prices of the coins in the market and the overwhelming drop of CBOE BTC Futures volume compared to that of CME.
CME is on the verge of facing stiff competition from other digital asset platforms, the most prominent of which is the highly anticipated Bakkt, spearheaded by the Intercontinental Exchange [ICE]. However, Bakkt has significant regulatory stalling and their launch has been delayed from January 2019 to later this year.
Other futures exchanges pegged to virtual currencies are Digital Currency Group and Polychain Capital, but Bakkt seems to be the overwhelming favorite.
In March, Terry Duffy, the Chairman of the CME, stated that stablecoins, backed by fiat currencies, would seek regulatory approval easier that decentralized currency. He added that the number of use-cases of cryptocurrencies should be expanded for it to be seen as a mode of payment rather than a mere volatile investment vehicle.
Most notably, Duffy shed light on the main cause of the regulatory obstacle for cryptocurrencies. He stated that the principle of limited supply, where only a certain number of Bitcoins can ever be created (21 million), is the main reason regulators stand in opposition to the decentralized currency market.
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