The digital asset industry entered the final month of Q2 2020 after saying goodbye to what was a very critical month for Bitcoin , the world's largest cryptocurrency. Bitcoin completed its third division in two in May and while many expected it to increase, its bullish momentum subsided a few weeks after the event.
But all was not lost. While many expected a stable correction period after halving, Bitcoin managed to hold onto the charts while the crypto-asset continued to hold above $ 9,000 most of the time.
The positive nature of Bitcoin was also underlined by the latest institutional newsletter from Deribit.
Source: Deribit
The exchange set a new record volume of Bitcoin options of 10.7k contracts and also recorded a significant increase in terms of Ethereum interest , the upcoming launch of ETH 2.0 seems to attract the attention of investors with each pass . day.
Source: Deribit
Reports of unprecedented open interest have also fueled community sentiment, with the exchange scoring a total of $ 1.4 billion in BTC options . In addition, total turnover in USD was over 13.7 billion in May 2020.
However, the most crucial fact about these numbers is the astonishing turnaround since April 2020.
In the past, sentiment in the derivatives market has always improved or decreased steadily, but the difference between April and May has been day and night.
April 2020 resulted in a 47% decrease from the previous month and noted the second lowest monthly return on the trade since April 2019.
However, in May 2020, total revenue increased by 61%, with May recording the third highest USD turnover since August 2019. With more than 332,000 BTC option contracts and more of one million ETH options (132% from April), the The derivatives market played its role in May 2020.
Importance of derivatives on spot trading
Now, we can suggest that the lucrative recovery in derivatives could be due to the rise in prices of BTC and ETH , but the wind is flowing in both directions. It is very likely that the positive rise in Bitcoin's valuation is due to the fact that investors have kept their confidence in the market.
Institutional investors have started to swarm in the industry, as companies similar to CME have also recorded high ROI, but the most important factor to note here is that the focus quickly moved away from dependence on considering the volume of cash transactions.
In the past, consistent spot trading was seen as an important measure for identifying trend reversals or price increases. However, the growing popularity of derivatives is changing the rules of the game at a breakneck pace.
The advantage of leveraged trading which can be used to carry out large transactions with a small amount of capital, while being able to predict future market risk and speculate on price volatility, becomes a very option popular in the derivatives market.
Accredited investors are beginning to recognize its potential and now it is largely becoming a common trading place. Therefore, it can be assumed that the price of Bitcoins and its futures and options contracts become more and more dependent on the industry.
