On July 25, the daily trading volume of bitcoin futures at the Chicago Mercantile Exchange (CME) has reached an all time high as 12,878 contracts were recorded based on 64 thousand BTC at the sum of around $530 million.
However, on Friday, July 27, bitcoin futures contracts offered by CME is set to expire which accordance with the past years would usually mean a significant drop in price of the top cryptocurrency. Futures contract allows institutions and traders to bet on the future performance of assets (long or short assets). According to statistics, five days prior to the closure of each monthly contract, bitcoins price drops by nearly 8%.
But perhaps this time around it could be different due to a substantial growth in interest towards the bitcoin futures market on behalf of the investors. CME has tweeted out a week ago figures that would support that sentiment.
WHY IS IT IMPORTANT?
Trading in bitcoin futures in U.S. was allowed in late December 2017. Bitcoin futures market is regarded to be less volatile in comparison to the ordinary crypto market.
In May, U.S. Federal Reserve System has stated that the decrease in bitcoin (Bitcoin: BITCOIN) price from nearly $20,000 has derived from the launch of bitcoin futures.