Bitcoin interest seems to be increasing again in 2020

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The interest in bitcoin (BTC) derivatives is increasing. The open interest is around an all-time high. With open interest is meant the number of outstanding derivative contracts that have not (yet) been settled.

CME Group announced on January 16 that there were 5,328 contracts open for them with a value of 26,640 BTC (~ $ 235 million).



Source

Bitcoin futures

That number has been higher for CME than ever since it started in December 2017. If the trading place holds this towards the end of the month, it will break the record of July 2019. At that time, 5,252 contracts were open.

With a future, traders can speculate on the price of bitcoin. You open a contract in which you agree on a future price. That can be higher or lower than the current one. So you can also speculate on a lower price if that suits you.

That is interesting for bitcoin miners, for example. In this way they can hedge against a possible decline, which can partially cover the financial risk for them.

Numbers

The price of BTC picks up again, we now and then raise to $ 9,000 at the time of writing. That in combination with an increasing interest in bitcoin derivatives ensures an active market at the moment.

According to unofficial data from Skew Markets , the market tapped a daily volume of $ 25 billion, most since October last year. The graph below shows the structure of that volume.

2020

The great thing about bitcoin is that you don't have to be an official investor to participate. The network does not discriminate. If you have a bitcoin address, you can participate.

However, there is also a large group of people who want to speculate purely on the price and do not like to own their own bitcoin. This is where financial products such as futures come into the picture.

The interest seems to be increasing again in 2020. This may well be the year for 'institutional investors' who will actually enter the bitcoin market. If they want to, then there are always more options for doing that.



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Posted via Steemleo | A Decentralized Community for Investors


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