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The Intercontinental Exchange's Bitcoin Volume Hits $5 Million in First Week

Oct 01, 2019
byOmar Abbas

The Intercontinental Exchange (ICE) launched its bitcoin futures platform last week and hit just $5 million in total trading. Both the daily and monthly contracts were debuted last week. According to CoinDesk, over 600 monthly bitcoin futures were exchanged since launching on the 23rd of September.

Bakkt, the subsidiary of ICE which serves as the new marketplace for digital assets, created each futures contracts to represent one bitcoin. Based on today’s price of approximately $8,300, the total trading volume works out to be a little over $5 million.

When compared to Chicago Mercantile Exchange (CME), close to 4,100 bitcoin futures contracts were traded on a single day alone last week (Friday). The Chicago-based exchange operator launched its market in 2017 with each bitcoin futures contracts worth five bitcoins, making its trading volume $165 million on the single day.

What makes Bakkt unique is that it should be more appealing to institutional investors like hedge funds since it’s actual bitcoin being delivered at the contract’s maturity date. On the other and, CME’s contracts are delivered in cash payments equivalent fiat value of bitcoin.

“It takes time for people to move from one place to another, unless there’s a cost reason or a liquidity reason,” said Dave Weisberger in telephone interview with CoinDesk, who’s the CEO of CoinRoutes and a veteran of Wall Street firms like Morgan Stanley and Citigroup. Weisberger added that “these things tend to develop slowly.”

A spokesman for Intercontinental Exchange, Damon Leavell, said in an email to CoinDesk that the contract maturing in October had the “tightest bid-offer spreads in the market, which was an exciting achievement.” Analysts on Wall Street often view the bid-ask spread (the difference between the price at which buyers are willing to pay and the price at which sellers are willing to accept) as a strong indicator of how efficient a market is operating.

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