Economy

Bitcoin Futures Volumes Outperform Spot Markets on Binance

Bitcoin Futures Volumes Outperform Spot Markets on Binance”

According to JPMorgan Chase, institutional interest in Bitcoin-related contract is building up and there is high anticipation for the upcoming launch of CME Group's options on January 13. Futures now account for around 75% of the total Bitcoin (BTC) market volume traded on the exchange. However, given the dominance of CME in the bitcoin futures market, things may now change, the note said.

According to the report, CME is dominating in trading Bitcoin Futures on regulated exchanges, which could serve as the game-changer in the long run.

The below chart - which shows what trends in an asset's volume, open interest, and price means for said asset's future trajectory - indicates that the most optimistic scenario for any market is if the asset's price, volume, and open interest for its futures market rise in tandem, suggesting "strength", "bullish" price action, and an overall trend of prices rising.

"There has been a step increase in the activity of the underlying CME futures contract" over the past few days, Panigirtzoglou wrote, noting that open interest has increased 69 per cent from year-end, and that the number of large open-interest holders has grown.

Bitcoin (BTC) futures options from CME Group saw volumes in excess of $2.3 million on the product's first day of public trading, the company has confirmed. Bitcoin, over the past few weeks, has seen its price, volume, and open interest increase all at once, showing effectively no signs of weakness.

Bitcoin's intrinsic value (an estimate of the actual true value) is still below market price, according to JPMorgan.

The investment banking giant calculates the intrinsic value of bitcoin by treating it as a commodity and looking at the marginal cost of production including computational power employed and electricity cost, per the report.

The market price of bitcoin has declined by nearly 40% from its peak, while the intrinsic value has increased by around 10%, strategists said.



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