CME Bitcoin options volume surpasses Bakkt in just 24 hours

The CME, which launched Bitcoin options on Monday, has already traded 54 options contracts in just 24 hours

The Chicago Mercantile Exchange (CME), one of the largest futures and options providers in the world, has launched its highly anticipated new Bitcoin options contracts to strong demand.

In total, 54 options contracts were traded on CME during its first 24 hours, which is hugely successful considering the exchange is tailored towards institutional traders.

The contracts were worth an estimated $2.3 million BTC. Interestingly, all of the trades on CME were calls – in other words, traders are speculating on Bitcoin’s price rising.

Many strategists have compared CME’s successful launch to its competitor, Bakkt, which has seen low options volumes since its debut.

In fact, CME’s 24-hour trading volume is greater than Bakkt’s entire volume since its launch in early December, which is around $1.15 million in total.

Compared to Bakkt, CME is a larger and more established options provider, which may have contributed to its opening success.

Yesterday, Coin Rivet reported that CME managing director Nikolas Panigirtzoglou said there had been a “steep increase” in interest from customers for Bitcoin options contracts.

The launch comes amid renewed enthusiasm for Bitcoin in recent weeks, which is already up 12% since the start of 2020.

Bloomberg analyst Mike McGlone reports that while the first day of trading has seen significant volume, the real test of demand will come within the first weeks and months.

CME Bitcoin futures

CME has long provided futures contracts for Bitcoin, with average daily volumes of around $370 million.

However, compared to futures trading platforms such as BitMEX, which trades in excess of $3 billion in volume daily, trading has been much slower.

This may be due to lower institutional and professional demand from traders, who are more likely to use a trusted and long-serving option such as CME.

The launch seems to have had a positive impact on the price of Bitcoin, with the world’s largest cryptocurrency rallying by more than 5% in a matter of hours following yesterday evening’s daily candle close.

This is in stark contrast to last September, when JP Morgan analysts attributed a sharp drop in Bitcoin’s value to the launch of Bakkt futures, despite it being touted as a “game-changer“.

As all the new CME contracts were calls, it may be a sign that institutional investors see a bright future for the short-term price of Bitcoin in 2020.

You can read more about CME’s Bitcoin options contracts here.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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