Open Interest on Bitcoin (BTC) Options on Chicago Mercantile Exchange Surges 1000% in May 2020


Open interest on the Chicago Mercantile Exchange (CME Group) for Bitcoin (BTC) options has surged dramatically during the past few days, following the third Bitcoin halving event, which effectively reduced the cryptocurrency’s supply by 50%.

An options contract is an agreement between two consenting parties to carry out a potential transaction with a particular asset at a predetermined price and date. Purchasing an options contract provides the right (and not the obligation) to buy or sell the underlying asset.

Open interest for Bitcoin options on CME reached $142 million as of May 15, 2020.

Data from Skew shows that the spike in interest accounts for a gain of more than 1,000% from only $12 million of open interest toward the end of April 2020.

CME reported an initial increase in BTC options trading volume between May 5 and May 6, 2020. Total volume on these days had reportedly approached $10 million, but then dropped to  the normal $1 million on May 8, 2020, which was notably the final trading day on CME before the most recent BTC halving.

Bitcoin options volume on May 11, 2020 (the day of the halving) surged again to $17 million. Options volume has consistently been between the $30 to $40 million range during the past few days.

The significant increase in volume has brought the open interest to $142 million at close of the trading day on May 14, 2020. This volume is more than 10x recorded at the end of last month.

Institutional investment interest in Bitcoin, the flagship cryptocurrency, continues to rise.

Large firms such as Fidelity Digital Assets and Grayscale Investments have both reported a dramatic increase in interest from clients for Bitcoin-related products.

Paul Tudor, a well-established hedge fund manager, recently revealed that nearly 2% of his equity is held in BTC..

Open interest in CME’s Bitcoin futures recently recorded an all-time high as well.

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