CME Group Reports Record Trading in Bitcoin Futures

Neil Dennis

CME Group, the Chicago-based derivatives exchange, announced on its Twitter feed at the weekend that daily Bitcoin futures contracts traded on its platform reached a record $1.7 billion on June 26.

While this surpassed the previous daily record by 30%, the physical price of Bitcoin on June 26 reached an 18-month high of $13,827, inflating the notional value of the futures contracts greatly.

day_CryptoCompare_Index_BTC_USD_91_11561993162310.pngChart shows the physical Bitcoin price hit 18-month high on same day as futures exchanges reported record volumes

Institutional Interest Building

Volumes traded, however, also set a new open interest record of 6,069 contracts as institutional interest continued to build, the CME Group said.

By trading futures - a contract between a vendor and a buyer on the price movement of an asset over a predetermined timeframe - investors can make money both on gains and losses in the price of that asset.

Short futures positions are taken when investors wish to back price losses, and institutional investors were seen to be raising their short positions during the week ending June 21, according to data provided by the Commodity Futures Trading Commission (CFTC). 

On the CME, the data compiled by the CFTC showed total long positions taken by leveraged funds were 3,093 contracts, compared with 3,246 shorts, giving a net short position of 366 contracts. The data suggested hedge funds and other large asset managers were preparing for a price downturn.

While the Bitcoin price continued to rise until hitting its 18-month peak on Thursday, June 26, it has since fallen back to around $10,500 - down 24% in just five days.

Trillion Dollar Mark for BitMEX

Separately, the BitMEX exchange said it had totalled more than $1 trillion in cryptocurrency-tied futures trading volumes over the past year, according to a Tweet by its co-founder Arthur Hayes.

The Seychelles-registered, unregulated exchange also saw $7 billion worth of cryptocurrency futures trade hands during the 24-hour period when Bitcoin hit its 18-month peak.

BitMEX is much more popular than any other crypto-derivatives trading platform, commanding some 57% of the market share, compared to CME Group's 2.5%.