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Bitcoin futures are currently seeing some renewed interest, as the profitability of the financial products seems to be on the rise once more. Even better, new information has revealed that institutional investors seem to be slightly bullish on bitcoin futures.
According to data published on October 22 by cryptocurrency analyst Skew Markets, institutional investors made long positions in Bitcoin futures worth over 1,000 BTC (about $8.2 million), up from less than 500 BTC ($4.1 million) in October alone. Clarifying on the class of investors Skew Markets said, “For reference, institutions include pension funds, endowments, insurance companies, mutual funds & portfolio/investment managers whose clients are predominantly institutional.”
Institutions seem to be all in
The trend is dispelling the myth that institutional investors are turning their backs on the investment products, especially given the weak launch that futures products from Bakkt had and the sustained drop in cryptocurrency prices that have had a lot of crypto bulls worried over the past few weeks.
The Bitcoin futures contracts from Bakkt were launched on September 22, much to the excitement of investors. Sadly, however, things didn’t seem to go as smoothly as everyone believed, as the company was only able to sell an underwhelming 71 contracts in its first 24 hours. The disappointing trend continued for quite a while, and market observers began to worry that this could signal the beginning of a slump for the cryptocurrency market once again.
In an edition of its market research, Binance Research posited that the launch and subsequent disappointing performance of the Bakkt futures had been responsible for up to a 20 percent drop in Bitcoin’s value. It is, however, worth noting that even Bakkt was briefly able to recover from its slow start and trade in some impressive numbers. According to information compiled by popular product tracker Bakkt Volume Bot, the volume of Bitcoin futures sold by Bakkt soared to 224 contracts on October 9, marking a 796 percent increase in volumes over just the previous day.
The uptick in those trading numbers coincided with a surge in the Bitcoin price, as the world’s most popular cryptocurrency saw its trading price go from $8,200 to $8,600 on the day as well. Now that Bitcoin’s value has dipped back below the $8,500 peg and is only just hanging on to $8,200, it is little wonder that current data shows yet another slump in the interest for the contracts. According to the Intercontinental Exchange website, only one contract had been sold on the day, with its last value pegged at $8,235 (all figures accurate at press time).
Regardless, Skew Markets is positing that institutions are still rather interested in the space. Hopefully, their interest can be rewarded with some gains soon.