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New CME Bitcoin Options Spark ‘Unusually Strong Activity’ — JPMorgan

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A review of Bitcoin futures volumes in the week prior to the launch of options reveals “high anticipation,” according to a note from the bank’s analysts.

The United States’ largest bank believes interest will be high in CME Group’s new Bitcoin (BTC) options when they launch on Jan. 13. 

In a note from Jan. 10 quoted by Bloomberg on Friday, a group of analysts at JPMorgan Chase led by Nikolaos Panigirtzoglou noted interest in CME’s existing Bitcoin futures had spiked in the run-up to the release.

“High anticipation” of Bitcoin options

On the shift in investor behavior, JPMorgan summarized:

“This unusually strong activity over the past few days likely reflects the high anticipation among market participants of the option contract.”

The events mark a contrast to the December launch of options from CME competitor, Bakkt, the analysts added, with volumes for that product staying “rather small.”

Overall, interest in Bitcoin futures has traditionally taken a long period to gather momentum. As Cointelegraph noted, Bakkt’s own launch in September mirrored CME’s debut in December 2017, both preceding an extended period of low volume. 

The start of futures trading further came in advance of a Bitcoin price drop, the absence of which could distinguish next week’s options launch.

A taste of market impact to come?

While JPMorgan did not link last week’s uptick in futures activity to BTC/USD performance, the pair nonetheless made significant gains, rising 15% from $7,300 last weekend to local highs in excess of $8,400.

Theories circulating among commentators also attribute the strong performance to geopolitical uncertainty centered on Iran

In a separate Bloomberg interview on Jan. 8, Sonny Singh, chief commercial officer at cryptocurrency payment processor BitPay, said even a small segment of new investors coming into Bitcoin was enough to move the market more decisively. 

Noting both the Iran crisis and the participation of companies such as Fidelity Investments, Singh added he forecasts Bitcoin breaking its all-time highs of $20,000 in 2020.

Source