Despite FTX Collapse Bitcoin Futures Surge

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As less­er investors flee the FTX-rav­aged cryp­tocur­ren­cy sec­tor, insti­tu­tions are ratch­et­ing up their long posi­tions in the futures mar­kets for the two lead­ing tokens.

CME Group
CME
report­ed a 42% increase in open inter­est con­tracts for bit­coin futures this month to 18,713 as of Nov.11. Each con­tract on the reg­u­lat­ed Chica­go-based deriv­a­tives exchange–the world’s largest–is equiv­a­lent to 5 bit­coin, or $81,780 at today’s price. Open inter­est refers to the mon­ey that investors tie up at an exchange as col­lat­er­al for open positions.

Ether saw an even-steep­er 62% jump in futures open inter­est rel­a­tive to the end of Octo­ber. These con­tracts are for 50 coins, or approx­i­mate­ly $61,250. The com­bined CME Group open inter­est for bit­coin and ether reached approx­i­mate­ly $1.5 bil­lion on Friday.

Far from dis­suad­ing insti­tu­tions from trad­ing in cryp­to futures, the rise in volatil­i­ty has attract­ed CME mar­ket par­tic­i­pants, includ­ing ProShares for its Bitcoin
BTC
Strat­e­gy ETF (BITO) and non­bank hedge funds that match their sell­ing trades to cryp­to funds’ buy­ing positions.

Gibral­tar-based LMAX Dig­i­tal, one of the most respect­ed spot cryp­to exchanges for insti­tu­tion­al clients, expe­ri­enced a 133% rise in its dai­ly trad­ing vol­ume since Nov. 4, pri­or to the FTX collapse.

In that time peri­od, the glob­al cryp­tocur­ren­cy mar­ket has shrunk 22.3% to $823 billion.

Cryp­tocur­ren­cy prices have been pun­ished by the fall of FTX, the Bahamas-based cryp­to exchange, and its sis­ter com­pa­ny Alame­da Research, a hedge fund. Bit­coin retreat­ed to 2020 lev­els as low ast $15,892 over the week­end. It has since recouped to $16,359 per bit­coin, though still 23% down from Nov. 4, accord­ing to Nomics.

Ether has also tum­bled 25% over the same peri­od to $1,224.

Deposits into cryp­tocur­ren­cy have also increased. While retail cus­tomers may be reel­ing from frozen funds and bil­lions in lim­bo because of the FTX bank­rupt­cy, Europe-based Coin­shares, a large spot cryp­to mon­ey man­ag­er, report­ed inflows of $42 mil­lion to the dig­i­tal-asset fund indus­try dur­ing the first week of the FTX cri­sis. This was the high­est amount of inflows after two months of no mean­ing­ful change in fund assets under management.

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