The number of accounts trading CME bitcoin futures grew in Q1 amid March slowdown

CME Group's bitcoin futures product saw a surge in new account trading in Q1 of 2020, the firm revealed exclusively to The Block. 

Launched at the end of 2017, CME's bitcoin futures product is among the most noteworthy US-regulated bitcoin-tied financial products.

The beginning of the year was marked by a surge in notional volumes with open interest above $1 billion at the end of February, as shown by data from Skew. Still, activity slowed down following a March 12-13 sell-off, which resulted in steep losses for traders across the market and dried up liquidity across crypto derivatives markets. 

According to data collected by The Block's Larry Cermak earlier this month, the notional value of CME's average daily volume for bitcoin futures dropped by over 50% to $242 million in March, as compared to $493 million in February.

As of this Tuesday, notional volumes for the product stood at $85 million, whereas open interest stood at $190 million. 



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Still, zooming out quarter one can be viewed  as a success, examining certain numbers. The firm saw the average daily notional value of volume for its bitcoin futures product grow 111% from 4Q 2019, according to research from The Block.

A spokeswoman said number of contracts traded is a more important metric as the firm makes money on a per contract basis. 

"Notional volume and average volumes really fell around mid-March," Thom Thompson of John Lothian News said, noting that exchanges make money not on the size of notional volume but in the number of contracts that trade on a given venue.

As for new client accounts, CME said it saw 567 new accounts that began trading CME's bitcoin futures. That is more than double the amount of new accounts that started trading in Q4 of 2019. It's a notable development, given that, as The Block reported in early March, institutional investors appeared to be shunning the product amid a broader sell-off in equities. 

"While liquidity can shift during times of heightened volatility, clients managed their bitcoin price risk in increasing numbers at CME Group during the first quarter of 2020," CME's Tim McCourt told The Block.

"For example, average daily volume in Bitcoin futures contracts grew 116 percent to 9,427 contracts, equivalent to 47,135 bitcoin, during Q1," he added.

This post and its headline have been updated for clarity regarding CME's bitcoin futures trading volumes. It also was updated to include a quote from derivatives expert Thom Thompson of John Lothian News.

About Author

Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].