CME Bitcoin Futures Volume Drops to 14-Month Low as Institutional Demand Slows

JH Kim

Summary

The Chicago Mercantile Exchange's Bitcoin (BTC) futures volume has fallen to its lowest level in 14 months.
Unfolded said the unwinding of basis-trade positions was the main reason for the drop in volume.
The market is watching whether changes in institutional fund flows will affect future price volatility and direction, and whether additional demand recovery emerges.

Forecast Trend Report by Period

Trading volume in Bitcoin futures on the Chicago Mercantile Exchange has fallen to its lowest level in about 14 months, reflecting softer institutional demand.

Unfolded reported on June 13 that monthly CME Bitcoin futures volume had dropped sharply to its lowest level in roughly 14 months.

The main reason for the decline was the unwinding of basis-trade positions, Unfolded wrote. The strategy is used mainly by institutional investors to profit from the price gap between spot and futures markets.

The reduction in those positions could translate into lower participation by institutional investors. It could also affect market liquidity and the market's supply-demand structure.

Traders are watching whether changes in institutional fund flows will influence future price volatility and market direction. Whether demand recovers further is also in focus.