In May, the trading volumes of the CME’s bitcoin futures were strong.
There was no new record, but they were significantly higher than in March or April.
In fact, the monthly peak in volumes occurred in May 2019, when BTC’s price jumped in a month from less than $6,000 to over $11,000, but at the time the open interest was high and relatively contained.
Since then the price fell and there were several months of low volumes, until January 2020, when the price rose again from around $7,000 to over $9,000. In fact, in January the trading volumes doubled compared to the previous month, reaching over 75% of the peak in May 2019.
In February the volume was only slightly lower than in January, but let’s not forget that February has two days less.
In March, despite the collapse of the financial markets, the trading volumes of bitcoin CME futures contracts did not drop. It fell to a little more than half of its peak in May 2019, but it was not much lower than it was in February.
In April it was significantly lower than in January and February, but with a reversal for open interest.
This reversal fully manifested itself in May, when open interest reached its monthly highs, more than twice as high as it did in May 2019.
Trading volumes were also sustained, well above those of April and not far from those of February.
It is no coincidence that the single day in May that recorded the highest trading peak was the 11th, the very day of the halving.
In reality, the average trading volumes on the other days of May were much lower, so it was the halving that made them grow in May. This probably means that Bitcoin’s fundamentals are of increasing interest to institutional investors as well.
Among other things, something similar happened to the trading volumes of Bakkt’s bitcoin futures, with a remarkable peak recorded on the 11th of May, and with sustained volumes throughout the month although on average far below the peak.
For Bakkt as well, open interest grew a lot in May, after an April with few trades and low open interest.
The fact that during the collapse of the financial markets in mid-March the trading volumes of bitcoin futures contracts, and open interest, were lower than those of May 11th really seems to suggest that even large investors are increasingly interested in the fundamentals of Bitcoin, compared to the possible correlation with other financial markets.