CME Group’s bitcoin futures product saw a surge in new account trading in Q1 of 2020 in spite of a decline in trading volumes and open interest, the firm revealed exclusively to The Block.
Launched at the end of 2017, CME’s bitcoin futures product is among the most noteworthy US-related bitcoin-tied financial products. The beginning of the year was marked by a surge in volumes with open interest above $1 billion at the end of February, as shown by data from Skew. Still, the party came to a halt after a March 12-13 sell-off, which resulted in steep losses for traders across the market and dried up liquidity across crypto derivatives markets.
According to data collected by The Block’s Larry Cermak earlier this month, CME’s daily average volume dropped by over 50% to $242 million in March, as compared to $493 million in February. As of this Tuesday, volumes for the product stood at $85 million, whereas open interest stood at $190 million.
Still, zooming out quarter one can be chalked up as a success, examining certain numbers. The firm saw the average daily notional value of volume for its bitcoin futures product grow 111% from 4Q 2019, according to research from The Block.
As for new client accounts, CME said it saw 567 new accounts that began trading CME’s bitcoin futures. That is more than double the amount of new accounts that started trading in Q4 of 2019. It’s a notable development, given that, as The Block reported in early March, institutional investors appeared to be shunning the product amid a broader sell-off in equities.
“While liquidity can shift during times of heightened volatility, clients managed their bitcoin price risk in increasing numbers at CME Group during the first quarter of 2020,” McCourt told The Block.
“For example, average daily volume in Bitcoin futures contracts grew 116 percent to 9,427 contracts, equivalent to 47,135 bitcoin, during Q1,” he added.