CME’s Bitcoin Futures Surge: What This Means for Cryptocurrency Trading

Booming Business: CME’s Performance in Bitcoin Futures

The Chicago Mercantile Exchange (CME) has taken the Bitcoin trading world by storm, with over 2.2 million contracts traded in 2020 alone. That’s right—over two million opportunities for traders to either strike it rich like a digital gold miner or face the dreaded loss like an unfortunate HODLer. Each contract at CME is equivalent to the dollar value of 5 Bitcoin, providing a hefty stake in this volatile market.

The December Surge: Riding the Bitcoin Wave

December 2020 was an exhilarating time for Bitcoin enthusiasts. After breaking its previous all-time high of $19,892 on December 1, the excitement led to an average daily volume of 11,179 contracts, translating to a staggering equivalent of 55.9K Bitcoin. That was a whopping 114% increase compared to the previous year—proof that when Bitcoin prices rise, so does the interest from traders.

Open Interest and the Institutional Rush

Another intriguing aspect of CME’s performance lies in the average daily open interest (ADOI), which reached an all-time high of 11,108 contracts (equivalent to 55,540 Bitcoin) in the last quarter of 2020—up 233% from Q4 2019. It’s as if institutional investors got a sudden case of FOMO, showing up in droves to secure their piece of this digital pie. The number of large open interest holders (LOIH) skyrocketed to 110 in the first week of December, hinting that the big players were ready to cash in on Bitcoin’s meteoric rise.

Looking Ahead: Ether Futures on the Horizon

What’s next for CME? The exchange has ambitious plans to launch Ether (ETH) futures in February 2021, expanding its offerings beyond Bitcoin. With a growing interest in cryptos, it’s likely that Ethereum enthusiasts will also want to get in on the action. Because who doesn’t want to speculate on the next big blockchain?

The Heavyweights: Corporate Interest in Crypto

While individual traders have played a significant role in the surge of Bitcoin futures, heavyweights like MicroStrategy and Square have also made headlines by investing substantial capital into Bitcoin. They’ve essentially put their money where their mouth is, declaring that crypto isn’t just a fleeting fad but a serious asset class worthy of investor attention. These corporate moves have undoubtedly paved the way for more institutional interest in the cryptocurrency market.