Chicago Mercantile Exchange (CME) says record trading activity for its bitcoin derivatives reflects a robust institutional interest within the imminent halving event.

In a note sent out late on Sunday, the derivatives exchange said a robust “ramp up” in volumes over the past week showed institutional investors were getting exposure to bitcoin, presumably in preparation before the supply-cutting event.

Primarily employed by institutional and professional investors, CME said 844 unique accounts have begun trading bitcoin derivatives since the beginning of 2020 – quite double the amount of latest market entrants compared to an equivalent period last year.

Average daily volume (ADV) for its bitcoin futures came in at 8,456 contracts year-to-date, quite 43% above an equivalent period of time in 2019, the firm added. Total volumes for bitcoin options contracts, which only launched in mid-January, are up to 2,250 contracts, with a record 216 contracts exchanged on May 6.

Open interest – contracts that haven’t settled – in both futures and options came in at slightly below 9,800 (around $423 million-worth of bitcoin) and 555 contracts (roughly $4.8 million) respectively on May 7. Average daily open interest is up 33 percent from where it had been this point last year, CME’s note said.

“With bitcoin halving set to require place on in the week , CME Bitcoin futures and options have seen a ramp-up in trading activity before this major event,” the exchange said. “Large open interest holders in Bitcoin futures reached a record of 62 during the week of Pan American Day , reflecting strong institutional interest.”

Ross Middleton, co-founder and CFO of decentralized exchange DeversiFI, said: “Soaring CME bitcoin futures volumes and [open interest are] evidence of the growing Institutional interest in bitcoin both before the halving and as a broader macro hedge.”

It comes as no surprise CME’s volume for bitcoin futures is up because it had been “one of the simplest way for legacy firms to realize exposure to Bitcoin,” Middleton added.

Brian Wong, co-founder, and chief product officer at futures market BTSE, said funds who wouldn’t otherwise have invested in bitcoin may have had a “flagpole” moment when celebrity hedge fund manager Paul Tudor Jones expressed his intention to allocate a neighborhood of his portfolio into the asset class.

Of course, CME remains a cash-settled derivatives platform, meaning that while institutional investors are gaining exposure to bitcoin, they are not physically holding it. Institutions are excited by the halving but are still only “trading paper,” said Mati Greenspan, founding father of crypto analytics site Quantum Economics. As such, they’re limiting their exposure to the asset class.

At the time of writing, bitcoin’s halving event – which can take block rewards down from 12.5 BTC to 6.25 BTC – was expected to require place in only under 10 hours. While the previous two halvings have caused big volatility spikes followed by extended rallies, there’s some uncertainty on how bitcoin’s price are going to be affected this point around.

In a blog post published Friday, CME highlighted this may be the primary halving to feature a strong and liquid derivatives market. Market participants can now create much more sophisticated market positions and miners can now lock-in and hedge their positions before the halving, the firm said. Thus “the selling pressure from miners is a smaller amount likely to act as a haul on bitcoin prices going forward,” the exchange said.

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