Bitcoin Futures, Options, and Open Interest: Crypto Derivatives Break Records After

Since the market rout on March 12, otherwise known as ‘Black Thursday,’ bitcoin futures and options contracts have seen significant demand. On May 14, CME Group saw the total number of outstanding derivatives contracts (open interest) touch a high of $142 million. Four days later, CME broke records again. Data from the researchers at Skew.com detailed that CME’s regulated bitcoin options open interest is up 10x this month.

Deribit’s Massive Options Volumes and CME Group’s Regulated Bitcoin Derivatives Markets Touch New Highs

Ever since the halving on May 11, there’s been a lot of action when it comes to bitcoin-based derivatives products. The research and analysis team from Skew.com publishes daily information about CME’s bitcoin futures and options, products from Bakkt, and a slew of other exchanges that offer crypto derivatives.

For instance, Skew detailed that the exchange Deribit’s bitcoin options open interest had touched $1 billion for the first time this week. On May 14, CME Group saw $142 million in 10-day combined daily volumes, which is far smaller than Deribit’s volumes but still a milestone for CME. The regulated exchange touched $172 million in total CME BTC options open interest, following the record performance four days prior.

On May 8, CME Group published a blog post about the bitcoin halving and discussed its derivatives products as well. “The emergence of a futures and options market has created a new ecosystem for bitcoin markets, which faces its first supply cut since 2016,” CME Group’s Payal Lakhani wrote at the time. The May 14, open interest breakout for CME Group’s bitcoin options was the first time it has ever crossed $100 million, Skew noted.

Between Deribit, CME, Bakkt, Okex, and Ledgerx the volumes pushed “total bitcoin options open interest to a new record [of] $1.1 billion,” Skew explained. Additionally, “CME bitcoin futures traded nearly $1 billion,” on May 12, 2020 the researchers disclosed.

Bitcoin Halving Fuels Speculation, the Very Driver of Crypto Derivatives Markets

Even Bakkt’s trade volumes increased after the halving, despite lackluster trading volume months prior to the event. “Bakkt had a solid halving session with a record volume day in $ notional, $51.8 million bitcoin futures crossed,” Skew tweeted the day after bitcoin’s third halving.

There’s been a lot of action with ethereum-based (ETH) derivatives products as well. Skew explained on May 21 that “17,500+ Jun20 240 calls traded yesterday on Deribit [at] $10.1 average dollar equivalent price.” When looking at Deribit’s ETH options buy/sell ration Skew said it “reads like overwriting as 76% of liquidity takers were sellers yesterday.”

The market carnage in mid-March was devastating to a lot of traders, and many derivatives players lost their shirts during massive liquidations. The price of BTC has strengthened since it…