A recent report published on the 6th of July by Cryptocompare has come to analyze the monthly trends within the crypto exchange market. This analysis has brought up an impressive result: Crypto derivative volumes have started to taper off ever since its peak that was hit in May. As an example, the crypto derivatives market saw a volume drop of 35.7% in Juna alone, going down to $393 billion in total value.
Increase Institutional Interest
The overall trend of reduced volumes can be seen in the spot markets, as well. This, in part, can be blamed on the total lack of volatility of the crypto market at large, Bitcoin included. The only real volatility is coming from the various DeFi tokens, which has recently managed to outperform Bitcoin by a considerable margin a month prior.
The overall volumes in the derivatives market may have dropped, but the regulated options market seemed to be experiencing the opposite. In Jun, Bitcoin options saw the total amount of trading volume on the Chicago Mercantile Exchange (CME) go up by a factor of 41%. This caused another all-time monthly high of 8,444 contracts traded. The same can’t be said for CME’s BTC futures, however, as it managed to drop down by 23%. Even so, it still recorded the second-biggest month in terms of volumes for 2020.
Increase In Interest A Global Trend
Institutionalization is seen as needed for Bitcoin, by many, as it could serve as a catalyst to bring Bitcoin and crypto at large into the mainstream world. As such, the massive volumes that the CME had experienced is a good sign, indeed.
This trend has been observed in other places, as well, such as funds like GBTC. GBTC, in particular, already boasts an institutional investor demographic of more than 80% and is managing a whopping $4.1 billion in digital assets at this time. Barry Silbert stands as GBTC’s Digital Currency Group CEO, and gave a tweet regarding the fund.
Record fundraising day today for @GrayscaleInvest
— Barry Silbert (@barrysilbert) June 23, 2020
According to Silbert, the fund had managed to go through its most significant raise yet, but the CEO had refrained from giving out much detail about it.
Regulation Brings Stability
Institutional-focused companies are already eager to jump on the crypto industry’s new institutional interest, which will only further cement the trend as a whole. One of the UK’s four biggest accounting firms, KPMG, has recently launched a crypto management platform, going by the name Chain Fusion.
The overall shift of Institution sentiment in regards to crypto will only do the industry well, as it may very well bring advantages to the market at large. In short, once institutional investors get their hands on the crypto trading industry, crypto exchanges at large will have to clean up their own acts, lest they are outcompeted by regulated, fair, transparent trading venues.