CME Bitcoin Options Eclipses Bakkt With a Strong Start

Daniel Fowler
January 15, 2020

Bloomberg Intelligence analyst Mike McGlone said that the day one volumes might well prove irrelevant in the grand scheme of thing with the weeks and months more material. According to the exchange's most recent report, BCH spot markets registered just $10.1 million worth of volume traded on the same day.

Notably, CME was the first to announce the launch of a regulated Bitcoin options market, however, Bakkt took over the actual product delivery by opening its platform for Bitcoin options on top of its Bitcoin Monthly Futures contract in December. Each dollar-denominated contract represents five bitcoins and is centrally offset to avoid counterparty risk.

If the price ends up being below $12,430, the bets would be lost, and the contracts would be worthless. The flagship token gained over 5% hitting peaks of $8,550.

The wider industry continues to work toward mainstream adoption while awaiting greater regulatory clarity in markets including the U.S. on issues such as a Bitcoin ETF product. If BTC price rises beyond that level on the said date, traders will rake in considerable profits.

Announced previous year, CME Group's much-anticipated Bitcoin options were launched on Monday and the ongoing bulls in the market resulted in massive demand for it.

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The developments are contrary to the December roll out of options by Bakkt, the competitor to CME. However, on January 7, 4,823 contracts worth $40.75 million were traded nearly beating the previous record.

For the past seven days, there has been a release of two options; CME's and FTX's.

CME has long provided futures contracts for Bitcoin, with average daily volumes of around $370 million. Putting live company data into context, FTX reported volumes of 3,618 BTC ($30.8 million) coming from its options trading in the last 24 hours.

If the real Bitcoin derivatives appear in the crypto market, trading on those derivatives will be more than compared to others. It is believed that mainstream and institutional investors became aware of digital currencies markets back in 2017. Will that happen? Time will tell.

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