On Monday, after the collapse of the market, the volume of Bitcoin trading futures contracts soared. They were traded on major global exchanges.
These have been difficult days for the world economy, especially due to the advance of the Coronavirus. Furthermore, Bitcoin has been unable to escape the financial mess, undergoing a series of abrupt changes in its price. Earlier today, in the midst of this, there was an impressive increase in the traded volume of Bitcoin futures contracts.
The effects of Black Monday
Since the beginning of the year 2020, cryptocurrencies have been the centre of attention for the financial markets. This is due to the significant bullish rally that positioned the price of Bitcoin. Once again, it was at around $10,000 per BTC.
The Coronavirus worldwide is a possible cause for all of this. It convince more cautious investors to seek safe havens for their capital in value storing assets. Even though all of Bitcoin’s trading movements in the past few months seemed to indicate that the market would collapse at any time, no one could have predicted yesterday’s decline. This left the world’s major economies in shock. In a matter of hours, they watched their exchanges lose something between 7% and 8% of their value.
The direct cause of this collapse was not the Coronavirus, but a political conflict between Saudi Arabia and Russia. The countries in question failed to agree to decrease oil production. Consequently, they avoided the drop of crude oil’s price.
In just one day, the price war between these two energy giants reduced the oil barrel price by 30%. All of this has turned the world economy on its head. Central banks are seeking mechanisms to build investor confidence and the Coronavirus is disrupting global supply chains. This created a favorable environment for large amounts of money to seek safe storage in assets, such as Bitcoin.
Bitcoin trading volume
Not surprisingly, following the turmoil caused by the market crash, the volume of transactions made with Bitcoin futures contracts has increased substantially.
The volume reached $198 million in the main exchanges of this financial product (Deribit, LedgerX, OKEx, and CME). This exceeded the previous record of $171.3 million, established in the month of February. During this day, most of the operations with futures contracts on Bitcoin were carried out through the Deribit platform. It is the largest exchange of cryptocurrency options in the world. Followed in volume by OKEx, and in a very distant third place, CME.
Yesterday, Bakkt‘s physical futures contracts on Bitcoin trading did not record any transactions. They were a great promise for a good part of last year. The last movement registered in that market happened on February 27.
All this, together with the 1.64% increase in the price of Bitcoin, allows us to see how the consequences of Black Monday reached the crypto market. This sparks investor interest in cryptocurrency-related products. It is also an attempt to safeguard their capital from the financial crisis that Coronavirus is starting to generate.