Days after the significant volatility and Bitcoin price declines, Bitcoin Options trading volume on regulated exchanges sees record-breaking lows. While CME’s Options platform recently hit its all-time low level, Bakkt’s situation is even worse without any action for weeks.
CME’s Bitcoin Options Volume ATL
In the middle of March, the cryptocurrency market, along with most financial markets, plunged amid the outbreak of the novel COVID-19 virus. In just a day, Bitcoin’s price dropped by approximately 40%.
The dramatic volatility seems to have scared off some institutional investors. Data from the popular monitoring resource, Skew, reveals that Bitcoin Options trading volume on regulated U.S. derivatives exchanges is at all-time low levels.
The Chicago Mercantile Exchange (CME) launched options on Bitcoin futures in January this year. It quickly grasped serious volume and recorded an all-time high of over $5 million in less than a week.
On Tuesday (March 17th), however, the exchange noted its worst trading day with only three Bitcoin options contracts. As one contract contains 5 BTC, the total traded amount was 15 BTC (or approximately $80,000). This showcases a $45,000 difference between the new ATL and the previous one from January.
Lack Of Trading On Bakkt
The Bitcoin Futures trading platform of the Intercontinental Exchange (ICE), Bakkt, rolled out its Bitcoin Options platform in December 2019. It was the first option on a futures contract for Bitcoin regulated by the Commodity and Futures Trading Commission (CFTC) in the U.S.
Even though it reached an ATH in January as well with over $500k, it has been all downhill since then. After CME launched its rival product, Bakkt’s volume has faded.
The giant American multinational investment bank, JP Morgan, confirmed the lack of options volume and open interest in a report, saying that both “have so far been rather small.”
According to Skew, there’re only a handful of days where Bakkt’s Bitcoin Options platform saw even one traded contract since the middle of January. Moreover, it has been consecutive weeks with no action now.
Interestingly enough, the low BTC Options trading volume comes only a few weeks after it reached all-time high levels. As Cryptopotato reported on March 10th, three days before the most notable price drops, the total volume came to about $200m.