Bitcoin futures debuted on the Chicago Board Options Exchange (CBOE) in December with CME Group following suit just a few days later. The derivatives linked to the largest digital currency by market value are seeing a steady rise in activity.
“The volume in trading bitcoin futures has been steadily rising since both the CME Group and Cboe Global Markets launched their futures contracts in December and as prices in physical trades of the digital asset stabilized,” reports U.S. News and World Report.
Nasdaq Inc. is still considering entering the bitcoin futures competition. Market observers previously expected Nasdaq to launch futures on the digital currency this year. The exchange operator has previously said that if it moves forward with bitcoin futures, its product will be different from those offered by Cboe and CME.
Derivatives help increase liquidity and improve markets for an asset category by allowing investors to bet on ups and downs of an asset, evening allowing individuals to adopt market-neutral strategies. They are also a key component in the creation of many futures-backed ETFs utilized by a range of investors.
Surging Volume on Bitcoin Futures
“Volume at the CME rose exponentially to 6,739 contracts on July 5 for the July contract, which is equivalent to $220 million. The average daily volume is typically 2,800 contracts, but by the next day, volume for the July contract dipped back down to 2,253 contracts,” according to U.S. News.