Institutional investors turned their backs …

Institutional investors turned their backs …

Institutional investors turn their back on CME bitcoin futures amid market crash

Global financial market turmoil has forced institutional investors to temporarily leave Chicago Mercantile Exchange (CME) bitcoin futures.

Bitcoin investors tend to view cryptocurrency as a non-correlated or “defensive” asset that will attract capital in times of economic uncertainty. The behavior of the market over the past week does not confirm this point of view..

At some point, Bitcoin did outperform the broader financial market. So, from March 4 to March 6, the price of the cryptocurrency rose by 4%, and S&The P 500 fell more than 2%. Considering a longer time frame, a different picture emerges. Since early February, Bitcoin and S&P 500 mostly move in tandem, while gold and US government bonds perform better.

Bloomberg analyst Tim Kalpan this morning drew attention to the discrepancy between the charts of bitcoin and gold amid growing concerns over the coronavirus epidemic. Correlation of digital and real gold reached -0.22.

Ryan Todd, an analyst at The Block, writes: “CME Group’s Bitcoin Futures are currently the simplest and most obvious product to access cryptocurrency among traders, traditional hedge funds and large asset managers. Assuming institutional investors are considering Bitcoin as version 2.0 gold, one would expect an increase in trading volumes and open interest within two weeks. “.

Institutional investors turned their backs ...

In fact, the opposite situation is observed:

Institutional investors turn their back on CME bitcoin futures amid market crash

The daily trading volume of CME Bitcoin futures surged to a peak above $ 1 billion the day before the US stock market reached an all-time high on Feb.19, after which it plummeted 75%. On Friday, the CME recorded the lowest Bitcoin futures turnover since the beginning of the year. Seven-day active position volume dropped 25% in the last two weeks.

Institutional investors turned their backs ...
Institutional investors turned their backs ...

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