Bitcoin Option Volumes Hit Fresh Records, Bakkt Saw Zero Turnover

Bitcoin options contracts are nearing the $200 million benchmark, volume-wise, as crypto-data Analytics firm Skew says the cryptocurrency derivative has touched a new all-time high yesterday. With $198 million worth of contracts sold in a single day, BTC options turnover on Monday has taken out the previous record high of $171.3 million set last month.

Skew data also shows that the Panama-based crypto platform Deribit continues to maintain its dominance with its metrics having dwarfed volumes on competing exchanges, including institutional marketplaces like CME and Bakkt. Specifically, Deribit has handled $170 million of total option volumes, commanding more than 85 percent of the market share worldwide.

The derivatives markets researchers from Skew have also recorded the options action on the likes of Bakkt, CME, OKEx, and LedgerX.

Subdued activity at Bakkt

Bakkt saw zero trading volumes in the last two weeks as the ICE-owned crypto startup continues to see a subdued performance of its recently launched bitcoin options. The last traded day for the BTC options at Bakkt was February 27, when less than ten lots got traded.

Bakkt rival CME Group, on the other hand, continues to see better interest for its bitcoin options. CME’s options started trading on January 13, and the marketplace saw a grand total of $2.1 million sold on Monday.

Since Bitcoin printed highs above $10,000 in early February, the cryptocurrency has been caught within a firm downtrend that has pushed it down to as low as $7,700. Coupled with the twin threat of coronavirus outbreak and oil price war, Bitcoin’s price action throughout the first quarter has drastically altered its bullish prospects, as investors are now widely betting that the ongoing drop extends significantly further. The shockwaves rattled investors, sending more volumes toward crypto derivatives.

The CME also provided updated metrics about its Bitcoin futures, which averaged 6,500+ contracts per day in 2019 (equal to around 32,500 Bitcoin), apparently representing institutional interest.

Both futures and options are a way for investors to bet on the trends of bitcoin price without having to actually hold the digital currency, which skirts regulatory and custodian issues. However, futures are in general riskier than options as the only financial liability for the latter is the premium paid at the purchase time. Futures contracts, on the other hand, involve maximum liability.

The derivatives markets researchers from Skew have also recorded the options action on the likes of Bakkt, CME, OKEx, and LedgerX.

Subdued activity at Bakkt

The CME also provided updated metrics about its Bitcoin futures, which averaged 6,500+ contracts per day in 2019 (equal to around 32,500 Bitcoin), apparently representing institutional interest.