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CME Says Bitcoin Futures Gaining Interest From Big Investors
The CME touts the success of its bitcoin futures contract, as the battle for institutional investors heats up thanks to competition from Bakkt.
CME Group, the Chicago-based exchange operator, said its bitcoin futures contracts grew in popularity last quarter, with the number of open contracts up 61 percent from a year earlier because of growing demand from institutional investors.
Open interest, or the number of outstanding positions, rose to 4,629 contracts, up from 2,873 in the third quarter of 2018, CME said Monday in a statement. And despite the quarter's 25 percent drop in bitcoin price, according to CoinDesk, the open interest in the CME's contracts was down just 1 percent from second-quarter levels.
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The average daily volume of contracts traded during the quarter was 5,534, up 10 percent from the year-earlier period. It was the equivalent of 27,670 bitcoin, or $289 million, according to the exchange.
"Institutional flow remained strong, with 454 new accounts added, compared with 231 added in the third quarter of 2018," CME said. Entities holding more than 25 bitcoin, used as a proxy for large investors, rose to 47, from 45 in the second quarter and 34 in the third quarter of 2018.
CME debuted its bitcoin futures in 2017 and outlasted a rival offering from another exchange company, Cboe Global Markets, which aborted its own contract earlier this year.
But the CME faces new competition from Bakkt, a startup sponsored by Atlanta-based Intercontinental Exchange, which debuted a new bitcoin-futures contract in September, aiming to attract institutional investors who might want to make bets on the cryptocurrency.
Some 50 percent of the CME's bitcoin-futures trading volume during the third quarter was outside the U.S., with 26 percent coming from the Asia Pacific region and 21 percent from Europe and the Middle East, according to the exchange.
CME HQ via Shutterstock
Bradley Keoun
Bradley Keoun is CoinDesk's managing editor of tech & protocols, where he oversees a team of reporters covering blockchain technology, and previously ran the global crypto markets team. A two-time Loeb Awards finalist, he previously was chief global finance and economic correspondent for TheStreet and before that worked as an editor and reporter for Bloomberg News in New York and Mexico City, reporting on Wall Street, emerging markets and the energy industry. He started out as a police-beat reporter for the Gainesville Sun in Florida and later worked as a general-assignment reporter for the Chicago Tribune. Originally from Fort Wayne, Indiana, he double-majored in electrical engineering and classical studies as an undergraduate at Duke University and later obtained a master's in journalism from the University of Florida. He is currently based in Austin, Texas, and in his spare time plays guitar, sings in a choir and hikes in the Texas Hill Country. He owns less than $1,000 each of several cryptocurrencies.
