While JPMorgan CEO warns the public that he expects the recession will be worse than 2008, crypto adherents are collecting profits. Per the Bitcoin futures analysis service Skew, after the recent March 12 sell-off, the futures markets top have experienced changes. With Binance now aggregating majority the of 24 hours total volume:
Come to papa.
— CZ Binance(@cz_binance) April 7, 2020
BitMEX keeps going down from the previous leading positions. Here’s the derivative volume statistics from Smart Stats:
- Huobi DM – $5.02B
- Binance (Futures) – $4.42B
- OKEx (Futures) – $3.22B
- BitMEX – $2.56B
- Hopex – $1.64B
- Bybit – $1.18B
- Bitflyer (Futures) – $1.16B
- FTX (Derivatives) – $847.6M
Looks like Huobi and Binance are the top exchanges by this metric. No matter which stats are correct, Binance and Huobi show a significant volume of almost $5.76 to $9 billion in Bitcoin Futures Contracts (depending on the data source).
On February 26, Binance issued a monthly brief claiming they gained an 85% increase in the volume of futures contracts in January 2020. The average daily volume was around $1.7 billion, with 14 January becoming the day of an unexpected $3.5 billion volume. At the time of writing, the data already shows Binance has $3.13 billion in volume.
Let’s look at the Aggregated Open Interest – BitMEX had around $1.2 billion on 11 March 2020. Now, they have around $558 million. At the same time, Binance had 158 million in open interest on 11 March. But now they accrue over $225 million, per the recent stats. The major picture looks like there’s a trend for open interest increase.
Futures Contracts Have Influence on Bitcoin Price?
Bitcoin’s price has doubled in the last 24 days. Since March 13, it has received a boost of over 100%. At the same time, Goldman Chief Equity Strategist David Kostin claims that the classic market is going to be bearish. ‘Risk to the downside is greater’, even if we count the recent Dow index positive trend.
Altcoin Sherpa suggests that Bitcoin is in preparations for the next awesome bull run. He has discovered that it repeats some mysterious price trend over time:
Many of the market traders believe that the futures market coincides with the natural Bitcoin price movement. For instance, during the second week of February, the unfilled price gap on CME caused Bitcoin to slide from $10,200 to $9,780. Specifically, in research by Seungho Lee, Nabil El Meslmani, and Lorne Switzer authors explain how bitcoin futures ‘provide some predictive power for future changes in the spot price and the risk premium.’
In the futures contracts, parties make bets on the future price of the underlying asset. They can take a long position and agree to buy Bitcoin in the future. Also, they can take a short position and agree to sell Bitcoin in the future at the current price. When the contract expiration date ends, the counterparties buy and sell the asset per the contract’s rate.
In many cases, such predictions help make additional profit. It appears from the price difference between the futures price and the spot price on the expiry date.
