Bitcoin Options Market Volume Hints Institutional Investors are coming
A document, published by CryptoCompare on July 6, carefully analyzed the evolution of changes in cryptocurrencies in the market over 30 days and found that the volume of crypto derivatives began to shrink after the peak at Might.
The current lack of volatility in Bitcoin and the majority of crypto-asset markets can be explained in part by the general trend that is also evident in the spot market. Record increased bitcoin options in regulated markets and rising interest in bitcoin as a speculative investment.
The DeFi token, which significantly surpassed Bitcoin (BTC) last month, is the second most popular cryptocurrency on the spot market, behind Bitcoin itself.
The market Challenges Faced
Despite the decline in total volume in the derivatives market, regulated options seem to be gaining popularity. Bitcoin options traded on the Chicago Mercantile Exchange (CME) rose 41% in June, and trading in bitcoin futures on the New York Stock Exchange (NYSE: NEX), the futures market grew 41% in June. BTC futures traded on CME fell 23%, although it was still the second-biggest month of 2020. While the rising volume of CME is a welcome sign for those who are patiently waiting for the catalyst that will propel Bitcoin and other cryptocurrencies to new heights, other factors point to a shift.
This trend is evident at GBTC, which has more than $1.5 billion in assets under management and is currently controlled by Formerly Goldman Sachs Group Inc (NYSE: GS). Although the details are not yet known, it has been tweeted that the fund has recently experienced its largest-ever increase.
Companies that respond to institutional needs are also jumping on the crypto bandwagon and cementing the trend. For example, a cryptocurrency platform called Chain Fusion was launched, the world’s first and only blockchain investment platform.
Institutions to Change Crypto The Way Never Thought
Institutional investors need a safe and transparent trading venue, as several cryptocurrency exchanges are known for counterfeit trading volumes, money laundering, and worse. As institutions continue to rely on bitcoin, this trend could continue, which in turn could bring many benefits to the overall market.
If you are in a stock market and have an excellent incentive to report real volumes, you get institutional money. Still, if you don’t have that incentive, it stays away. This could be a sign that exchanges need to act accordingly and phase out the use of counterfeit trading volumes in favor of a more transparent trading platform. These improvements could open the door to the long-awaited Bitcoin Exchange Traded Fund (ETF), which will lure institutional investors into the cryptocurrency sector.
