The covid-19 epidemic has caused unprecedented disruption to the global economy and virtually every market across the planet has suffered heavy losses. Traders are trying to find the most profitable and "safe haven ports" for their money flow amid this great crisis and much volatility.
One particular move that constitutes the best of times, Bitcoin and other cryptocurrencies have made strong moves this month. And interestingly, it seems that institutional investors have largely retreated from Bitcoin exchanges in recent swings.
Risky trading journey for Bitcoin investors
At the beginning of 2020 Bitcoin achieved quite good growth, in February, the Bitcoin transaction level reached a peak value of 10,400 USD. After that, it witnessed a strong downtrend.
According to a report by primexbt trading, the agreement between OPEC and Russia has been broken amid the worsening of the Covid-19 pandemic. This led to a sell-off of crude oil affecting other markets. Bitcoin is not immune to this influence either. On March 12 and March 13, the cryptocurrency plummeted — its biggest short-term drop ever — to below $4,000 on several exchanges.
As of now, the Bitcoin value is increasing again and is trading at around $6,650. Some analysts say that recent stimulus packages from central banks around the world have created an impetus to buy again. However, in a previous report, BeInCrypto stated that there are still many stablecoins waiting to be included. The sheer market capitalization of cryptocurrencies like USDT and USDC at the moment highlights the move of investors who are uncertain about Bitcoin's next move.
Regardless of how Bitcoin's value fluctuates, what's notable in the recent price movement has been the "absence" of investors in Bitcoin futures contracts. This is pointed out by John Todaro – Head of Research at TradeBlock, who pointed out that CME futures volume – by far the largest Bitcoin exchange, has been significantly lower than normal transaction volume.
BTC futures trading volume
“Are the major institutions sitting outside the recent #bitcoin volatility?
While spot bitcoin (XBT/USD) volume for the month hit near-peak highs, CME futures volume has been fairly low in recent times.”
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Venture capitalists love volatility
Todaro found that spot trade volume on crypto exchanges was at its pre-volatility peak in July 2019 at nearly $14,000. However, at the same time, CME futures volume was trading near its lowest level.
Todaro has questioned whether major institutional exchanges have not been involved in Bitcoin's recent moves? The CME Group also only allows trusted investors to trade Bitcoin futures contracts, and most institutions would not be allowed to trade in an unregulated industry. That seems like a fair result.
Due to widespread volatility in global markets, it is currently more profitable for those with the funds to invest in Bitcoin futures contracts on CME than trading in physical locations. other. As previously reported by BeInCrypto, the volume of futures contracts usually increases at times of high price volatility.
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