CME Bitcoin Futures Experience Dramatic Volume Fluctuations in February 2020

Bitcoin Futures Hit New Daily Volume Low

On February 21, 2020, the Chicago Mercantile Exchange (CME) saw its bitcoin futures trade volume plummet to an all-time low for the year, with merely $118 million in contracts swapping hands. What a difference just a few days can make!

A Historical Contrast of Volume

This slump in volume came shockingly close to a high-water mark just three days earlier, when the volume had soared above $1 billion for only the third time ever. On February 18, a whopping $1.1 billion worth of contracts, equating to over 23,000 transactions, had been recorded. Talk about a rollercoaster; it’s enough to make your head spin!

The Dismal Decline

Unfortunately, this theatrical spike in activity wasn’t long-lived. The following day, February 19, the volume dipped by almost 55%, collapsing from $499 million to $211 million. By February 21, the slide continued, resulting in a staggering 44% decline on top of the previous day’s losses. In less than a week, CME bitcoin futures decimated nearly 89% of the trading volume. Ouch!

Record-Setting Trade Days

For some context, the highest single day of trade activity for CME’s bitcoin futures was on May 13, 2019, achieving $1.3 billion worth of contracts as bitcoin tested the $8,000 mark. A similar phenomenon occurred just a month later, on June 27, when BTC surged intraday by $1,500, reaching a high of almost $13,800 in 2019. Quite the peaks and valleys!

Upcoming SEC Decision on Bitcoin ETF

Meanwhile, all eyes are on the U.S. Securities and Exchange Commission (SEC) as it prepares to announce its verdict on Wilshire Phoenix’s bitcoin exchange-traded fund (ETF) on February 26. While many crypto enthusiasts remain skeptical about its approval chances, the firm’s founder, Bill Herrmann, claims they’ve had “thoughtful and meaningful discussions” with the SEC. Fingers crossed!

A History of the ETF Proposal

Wilshire Phoenix initially submitted its ETF proposal back on June 12, 2019, and the SEC initiated proceedings on September 24 the same year. The subsequent update saw the firm team up with NYSE Arca and appoint Coinbase as the custodian of the product. Most recently, a filing update outlined the specifics of the offering including fees of $2,437, a registration of 8,040 shares, and a maximum share price projected to be around $2,500.