Bitcoin just recorded a new major milestone as open interest on the cryptocurrency’s options grew by 1000% so far this month. Open interest in Bitcoin options surged in the first two weeks of May, by a figure that is 10 times more than that was recorded in the whole of April.
The interest in bitcoin options has grown massively in the past couple of weeks as attention turned to the leading digital asset due to its recent halving event. Data obtained by crypto market analytics firm, Skew, shows that open interest in bitcoin options on Chicago Mercantile Exchange skyrocketed from $12 million at the end of April to $142 million by May 15.
— skew (@skewdotcom) May 15, 2020
The rapid and massive surge in Bitcoin options comes in the wake of the much anticipated halving event that saw miner’s reward reduced by half from 12.5 to 6.25 coins. According to Skew’s data, there has been a sustained increase in options trading throughout May in anticipation of the deflationary effect of Bitcoin halving.
The surge in options trading on CME begun on May 5 as volumes rose towards $10 million. There was a similarly large trade volume the following day on May 6 followed by a steep decline to the $1million region on May 8. This small volume was recorded on the final day of trading on the mainstream financial markets before the bitcoin halving.
Open interest in bitcoin options surged once more on May 11, the day of the halving event to hit a high of $17 million. Since then, the volume skyrocketed as the markets reacted to the declining supply of new bitcoins with trades of over $30 million in the following three days.
The growing interest in bitcoin options comes in the wake of increasingly positive sentiment about the virtual asset. There has been an increase in institutional investment in bitcoin as uncertainty in the conventional markets continues to grow. Recently, hedge fund manager Paul Tudor Jones stated that he had allocated about 2% of his wealth to Bitcoin. Jones announcement followed reports that renowned institutions like Fidelity Digital and Grayscale were pursuing bitcoin investments.
Interest in bitcoin continues to grow and it seems highly likely that the trend will hold at least in the near future as investors continue to react to the bitcoin halving event.
Image courtesy of Pixabay
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