Institutional investors turn their attention to deliverable bitcoin futures

Moreover, among such market participants, investment strategies based on retention of assets are gaining popularity. This is indicated by the ratio of the level of open interest to the trading volumes of regulated platforms.

For institutional investors, it is increasingly important to own bitcoin (BTC) with its actual delivery, rather than in the format of futures, which are settled in fiat currency. Such investors also do not care about the volatility of the largest cryptocurrency in terms of capitalization – more and more institutions adhere to a hold strategy, that is, holding assets. This is stated in a study published last week on the crypto-derivatives platform ZUBR.

Note that GlassNode analysts have already paid attention to the activity of hodlers. According to the company, over the past year, 63.3% of all mined BTC were inactive, which is an absolute record.

The ZUBR report says that institutional investors still rely on regulated exchanges to access bitcoin derivatives. Derivatives are derivative financial instruments whose value depends on the price of their underlying asset.

Whenever possible, delivery of the underlying asset, these instruments are divided into settlement and deliverable. In the first case, only cash settlements are made between the parties to the transaction – the actual delivery of the asset is not provided. In the second case, it is assumed that the obligations for the delivery and acceptance of the underlying asset in full are fulfilled.

Indeed, in September, the annual volume of bitcoin futures trading surpassed the $ 4 trillion mark. In 2020, the average monthly trade volume reached $ 378 billion – an average of 60% higher than in 2019.


Bitcoin futures trading monthly volumes. Source: ZUBR


The ratio of open interest to trading volumes. Source: ZUBR

However, the physical delivery of bitcoin is becoming an increasingly important factor. As an example, ZUBR cites the Bakkt platform, which the week before last updated the maximum trading volume for bitcoin futures. At the beginning of 2020, settlement futures accounted for more than 50% of the platform’s total trading volume, but by August, deliverable futures accounted for 72% of the trading volume.

Институциональные инвесторы обращают внимание на поставочные фьючерсы на биткойны

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