According to data from Skew Analytics, aggregate open interest for Bitcoin options surpassed $1.3 Billion on May 20th, and is currently sitting at an all-time high. Open interest refers to the total number of outstanding option contracts, that have not been settled. Aggregate open interest provides a more accurate picture of the options trading activity, and whether money flows into the options market are increasing or decreasing. Aggregate open interest for Bitcoin options has been on a sharp upswing in 2020.
As of May 20th, Deribit had the largest open interest on the market, touching close to $1billion. Although, hedge funds like Rentech and Tudor Investment Corp that added Bitcoin derivatives to their investment mandates chose the Chicago Mercantile Exchange (CME) for the platform’s traditional reputation.
Overall, the sharp rise in the aggregate open interest for Bitcoin options specifically on the Chicago Mercantile Exchange (CME) shows that institutions are paying close attention to this asset class. It will be interesting to see how 2020 progresses as more traditional hedge funds begin adding Bitcoin to their investment mandates.