Trending Bitcoin News and Market Sentiment January 21st, 2020: CME Sees Doubling of Open Interest in Bitcoin Futures, Turkey Plans Crypto Smart City Within a Year



bitcoin

  • The climb back for Bitcoin to USD 9,000 begins with a daily high so far of USD 8,739
  • CME has recorded more than a doubling of open interest in its Bitcoin futures this year
  • Turkey has revealed plans for a crypto-based smart city due to go live within a year

 

A higher daily low so far is Bitcoin’s foundational short-term update, and at USD 8,502, it has built the base for a daily high of USD 8,739 (CoinDesk), but the average trading range has been USD 8,600 in the day so far with Asian and European traders taking tentative steps upwards.

As the US traders await on the East Coast, one item of note filtering out from yesterday evening was that open interest in the new Bitcoin futures options offered by the Chicago Mercantile Exchange (CME) have doubled in the early days of 2020. This refers to the amount of contracts that have yet to expire, been exercised or delivered physically.

Analytics company Skew reports that some 5,300 contracts had opened up on the CME platform on 17 January, amounting to around USD 235 million in positions. This compared to only USD 110 million in positions opened in early December. few days of the year, as noted by data analytics firm Skew.

The amount of open interest seems to have soared along with Bitcoin’s upward trend in price, after bottoming out at USD 6,400 in mid December before rushing along to the weekend’s two-month high of USD 9,100. On a year-to-year basis, Bitcoin has still made a 20% gain with current prices today, so it seems to correlate with growing interest in Bitcoin futures.

As we reported before, CME’s Bitcoin futures had been receiving a lot of activity running up to its launch, with more than 5,000 contracts in open interest in just the first four trading days of the week. Once options went live on 8 January, over 17,000 contracts worth 85,000 Bitcoin or USD 731 million changed hands, alongside 55 options contracts worth USD 2.3 million. These contracts, at a representative value of 5 Bitcoin, then doubled to 122 contracts on Friday, estimated at USD 5.3 million.

CME itself notes that almost 6,400 futures contracts worth 31,850 Bitcoin were handled over its platform every day in 2019 and sees no slowdown in volume growth nor in customer interest. It announced:

“BTC has seen remarkable growth in volume and customer interest with nearly 2.5M contracts traded to date and 4.9K+ contracts traded daily.”

Last month, CME Group managing director Tim McCour said:

“CME’s product has evolved over the last two years and is now one of the most liquid, listed bitcoin derivatives globally. We have seen strong participation from institutional investors, physical bitcoin traders and other clients who value the transparency, price discovery and risk transfer that only a regulated marketplace like CME Group can offer.”

Other exchanges also witnessed increased activity over the last few months. Total trading volume rose in futures listed across the globe to well above $25 billion on Jan. 14, according to Skew. That was the busiest day since Oct. 26.

Meanwhile, in Turkey, a major city called Konya is about to become a blockchain hotspot, with the Konya Science Center hosting a team that will help apply blockchain to municipal services and set up a Science and Technology Valley.

The historical city, birthplace of the famous philosopher and poet Rumi, was announced as the site of the latest blockchain city by its Mayor, Uğur İbrahim Altay, during an Ankara congress on local smart cities. Apparently, a “City Coin” to go along with the smart city will be the basis for a financial ecosystem created based on blockchain.

Speaking to Cointelegraph, Konya Science and Technology Valley head Dr Ali Osman Çıbıkdiken explained that the team had seven blockchain developers whose aim were to explore new uses cases for blockchain tech in funding social programs.

In effect, it hoped to help the local government and stakeholders in managing a reserve fund on blockchain, that would go towards social aid. A prototype is already expected by June and due to go live within a year. Konya seeks to become a global prototype for local governments. Çıbıkdiken explained:

“The cryptocurrency we are currently developing will be used in social aid programs, municipal corporations’ activities, public transport, and environmental services. This blockchain-based local ecosystem will serve the Konya citizens. The project will also see the development of a payment system to enable crypto in many municipal services.”

 

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