This article comes fromCoindesk, original author: Galen Moore
Odaily Translator |
Odaily Translator |
For those media reporters who pay attention to Bitcoin derivatives, now is definitely the best time, because this matter has attracted a lot of attention recently. But for those trading bitcoin derivatives, everything seems to be normal, without too many waves.
Last Friday (September 20), the Chicago Mercantile Exchange (CME) announced that it would provide options trading for its Bitcoin futures contract. The proportion of trading volume in the period is almost zero. But even so, looking at the entire cryptocurrency industry, you will be hard-pressed to find a reliable option counterparty like CME Group. More importantly, CME Group can directly provide options trading services to customers without rebuilding the infrastructure.
But the question is, why does CME Group still "go its own way" to launch options business when the proportion of transactions is so small?
In fact, in the regulated cryptocurrency derivatives market, CME Group is already worried about its leadership position. One of the important reasons is that Bakkt officially launched a regulated physical delivery bitcoin futures contract product this week. The biggest difference from CME Group's similar products is that Bakkt customers will receive actual bitcoins after the contract expires, rather than cash settled at an agreed price.
Perhaps CME Group is worried that those who trade Bitcoin in the market will think that physical delivery of futures contracts is more important, so they decided to make some noise before Bakkt launched the product, which can more or less suppress Bakkt's strong limelight.
However, is Bakkt, which has just launched physical delivery bitcoin futures contracts, really cool?
Speaking of Bakkt, their just-launched one-day physically delivered Bitcoin futures contract and the “October 2019” monthly physically delivered Bitcoin futures contract do not seem to be doing as well as they should. The first-day trading volume of the October monthly futures contract was only 71 BTC, which is simply not comparable to the futures contract products launched by CME Group in December 2017—but it should be noted that CME Group launched futures contract products The time coincided with the price of Bitcoin reaching an all-time high, so it is somewhat unfair to compare them with Bakkt in the current market environment.
However, so far, no traders have traded Bakkt's monthly bitcoin futures contract product, and the single-day bitcoin futures contract traded 2 BTC on Monday (September 23).
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After all, cryptocurrency futures still need to be oriented to retail investors
The first regulated bitcoin futures were launched by CME Group in December 2017 — just before the price of bitcoin plunged 83 percent from its all-time high. However, CME Group’s Bitcoin futures trading volume at the time did not exceed $100 million, so it is difficult to say that futures trading has brought sanity to the market.
Many practitioners in the cryptocurrency industry feel that new products such as physically-settled bitcoin futures contracts will open up exposure to bitcoin and will increase demand from institutional investors. The growth rate of product demand is not as fast as people expected.
However, if you search for the keywords "Bakkt trading volume is too low", you will understand that cryptocurrency futures still need to be oriented to retail investors after all. If you were in 2017 and watched the price of Bitcoin rise day by day, who would have thought that it would plummet this Tuesday (September 24th)? Otherwise, you must take the time machine and short Bitcoin to make a fortune. So, let's be clear, after all it's 9012 and those who understand cryptocurrency best have realized that institutional investor interest in Bitcoin is slowly developing, even if it is developing.
For institutional investors, cryptocurrency derivatives offer an easy-to-understand solution to the operational hurdles associated with custody, investment, and risk (the regulated Bitcoin futures structure is no different from FCOJ futures) ).
Today, however, the lion's share of cryptocurrency trading volume takes place on unregulated exchanges that don't operate as clearinghouses but offer retail investors up to 100x leverage. This kind of business makes those regulated asset management companies envious, and naturally they are also very interested.
While there have been questions in the industry about the reliability of volumes reported by exchanges (OKEx and Huobi in particular), Bitcoin traders on OTC platforms know that there is liquidity in the market and their hedging strategies rely on it sex. On top of that, the money for these leveraged trades may all come from cryptocurrency hedge funds, who, as one trader put it, are like “degenerate gamblers” trading from their own accounts.
Let's take the bitcoin futures market again, there is actually no natural hedge in futures, if you think otherwise, compare the global operating expenses of gold miners and bitcoin miners.
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the road ahead
Cryptocurrency derivatives are a "sweet pastry", which also paves the way for institutional investment, but it is obviously not enough to use this "sweet pastry" to make a table full of Chinese. But for now, CME futures trading volume has pointed out a way for investors to see that Bitcoin futures have a future.
You may have seen that the chart shows that the trading volume of CME Group has gradually increased since May, and the timing is very consistent with the double increase in the price of Bitcoin this year. In July, CME futures trading volume surged, and now it has basically returned to the moderate growth since the first quarter.
Now, at least four startups are preparing new cryptocurrency derivatives for U.S. institutions and other regulated markets, all based on physical clearing. It remains to be seen, however, whether physically delivered bitcoin futures contracts will increase market participation — which, of course, is not always so important in derivatives built on other asset classes.
