The Chicago Mercantile Exchange (CME) traded more than $5 billion in bitcoin futures contracts in August. Each contract represents the user's rights and is not obligated to purchase 5 BTCs at a given price, which means that the platform has traded more than 100,000 futures contracts.
From the beginning of the year to the present, the volume of transactions is even more impressive. CME Managing Director Tim McCourt told Forbes contributor Benjamin Pirus that so far, CME Bitcoin futures have signed an average of more than 7,000 contracts per day.
This data is very meaningful because it is difficult for retail investors to trade futures in CME, so the increase in average daily trading volume does not mean that ordinary encrypted users are involved. On the CME platform, most futures trading comes from institutional investors and wealthy investors with specific qualifications, which are the people Bitcoin users have always wanted to capture.
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It is widely believed that the bitcoin bubble was driven by retail investors in 2017, but if prices are to rise again, they will need a larger pool of capital. The influx of institutional investors may bring these capitals, so it is important for those who are optimistic about bitcoin to have an interest in having millions or billions of dollars.
The $5 billion itself is a large number, but the following can help you better understand this number: the daily trading volume of the top ten bitcoin spot market is about $1 billion, or the monthly trading volume is about $30 billion. In the spot market like Coin and Coinbase, it is difficult to determine whether the trading volume is from retail investors or institutional funds, but the trading volume of these two platforms is likely to come from retail investors.
Most of the daily trading volume on the Bitcoin network comes from retail investment. However, the increase in daily trading volume of the CME platform (no growth in the previous two years) indicates that institutional funds are flowing into Bitcoin. The Bakkt organization is coming soon, and its bitcoin futures contract may be another catalyst for introducing institutional funds into the encryption ecosystem.
Of course, this does not necessarily mean that all institutions are bullish on Bitcoin, and they can also use the futures contract to bet on bitcoin. Even so, for those who are optimistic about Bitcoin, it may be very happy to have more institutional funds related to Bitcoin transactions.
More and more organizations are involved, and even if there is no guarantee that the future will succeed, it is definitely a good sign.
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