Bitcoin futures dominate the futures volume of this year’s Q1

Bitcoin futures dominate the futures volume of this year’s Q1
Written by:
Ali Raza
25th April, 13:04
Updated: 28th April, 13:11
  • Bitcoin futures contracts dominated the futures trading sector's volume in Q1 2020.
  • Recent reports indicate that Bitcoin futures own 78% of the total futures volume.
  • The reason for this is likely the fact that institutions tend to invest in BTC futures

The mid-March major price crash managed to affect the entire crypto industry, and no aspect remained unharmed. Alongside the falling prices, other aspects got affected, as well. This includes things such as the industry’s user activity, mark sentiment, on-chain fundamentals, and more.

Bitcoin futures contract turnover nearly at 80%

Of course, the situation also hit the derivatives sector, alongside all the others. However, it did not last for long, and the market started its recovery barely a month later. Once again, the crypto derivatives sector performed as well as the others in the industry.

In fact, recent reports indicate that the crypto derivatives sector in Q1 of the year came out to be $2 trillion-large. This is quite an impressive figure, given the major dip over the last few weeks in March. Not to mention that the figure is more than 300% above the average from last year’s quarters.

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Clearly, the derivatives market performed quite well, based on the report’s information. The document also mentions the major asset futures contracts, noting that many saw major volumes.

As expected, Bitcoin is undoubtedly in the lead. The report notes that “Three major asset contracts of cryptocurrency futures accounted for more than 90% of the total market turnover in 2020 Q1, and the remaining contracts accounted for less than 10%; among them, the BTC futures contract turnover accounted for 78%.”

Why are Bitcoin futures in the lead?

The report also noted some of the suspected reasons behind this kind of behavior. For example, BTC is in the lead due to higher liquidity than what other pairs can offer. Low volume suggests the lack of liquidity, so traders tend to avoid such assets, causing their volume to remain low.

Another reason for Bitcoin to lead is that institutional investors prefer it. Of course, they still hesitate to invest in Bitcoin itself, but they are perfectly comfortable with going after BTC futures. They know how to deal with futures, if not with actual cryptos. With the CFTC to regulate Bitcoin futures trading, there is nothing to stop them from participating.

And, with Bitcoin futures available to professionals, it is hardly surprising that their volume exceeded all others. After all, the likes of LTC, EOS, and others did not attract this sort of traders and investors just yet.

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