The CME Group’s Bitcoin Futures market has closed at $10,475 before the weekend, indicating that even institutional investors are bullish.
The CME Group is the owner of some of the largest derivatives markets in the world, from options trading to futures. Bitcoin has consistently boasted high volume on the exchange, and oftentimes it has an impact on the entire market. The recent close on Friday had given Bitcoin bulls reason to be optimistic that the rally will continue, though it seems to have paused for now as Bitcoin fell to $9.8k.
CME Futures Posts Bullish Close
Bitcoin futures on CME have closed before the weekend at $10,475, while Bitcoin has dropped and is trading at around $9,800. Because CME is usually a place for more institutional traders and investors, the close is good news for Bitcoin and the entire cryptocurrency market—it seems that most traders are expecting another move up.
CME Bitcoin Futures have closed at $10475, prior to the weekend.
This is quite bullish for Bitcoin spot prices ??
The crypto rally looks poised to continue.
— Omar Bham (Crypt0) (@crypt0snews) February 14, 2020
The turnaround of the market is shocking considering where we were just two months ago. In December, open interest on CME Bitcoin futures dropped to a 6-month low as BeInCrypto reported then. General interest seemed lackluster, and there was uncertainty over where the market would go. However, there has been a dramatic turnaround in the past two months, which has defied expectations. As BeInCrypto reported on in mid-January, Bitcoin futures exploded to some $20B and continues to stay high. Overall, it is looking like 2020 may be the year for Bitcoin-related derivative trading, which has been booming as this bullish rally heats up.
Do Futures Markets Hurt Bitcoin?
Many in the cryptocurrency market remain critical of Bitcoin futures and options market. There is a prevailing opinion that these markets do nothing but “manipulate” since they do not rely on trading real BTC but merely IOUs. This is true even for Bakkt, an exchange which promised futures and options trading with physical BTC. Yet, only 63% of Bitcoin futures are actually backed by BTC. Also, given that Bitcoin futures on CME emerged right before the bearish 2018 winter, many blame markets like it for bringing on the asset’s drastic fall from $20,000.
However, such concerns may be overblown. As it stands now, growing volume on CME and a higher-than-expected close can be a powerful bullish indicator for traders. With the market now posting positive indicators for the first time in a while, traders would be smart to keep an eye on futures exchanges despite their criticisms—it could provide them with a hint on where the market is going. As of now, CME futures traders are betting on another move upward.
