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Crypto derivatives volume shrinks in June but institutional interest gaining momentum

A recent report revealed that crypto derivatives trading volume declined in June.

Image by Pete Linforth from Pixabay

Wed, 08 Jul 2020, 12:10 pm UTC

A recent report revealed that the volume of cryptocurrency derivatives in June plunges to a new low for 2020. However, the same report also suggested that despite the overall decline in trading volume, institution interest during the same period seems to be on the rise.

From a record high in May, the trading volume of crypto derivatives plunged 36 percent in June, according to This is based on a recent report by Cryptocompare revealing that trading volume for the month only reached $393 billion.

For comparison, crypto derivative trading volume soared to a record high of $602 billion in May, which was likely due to the hype generated by the halving event. The decline in June is likely caused by a lull in investor interest during the period.

Total spot volumes plunged the steepest. From $1.27 trillion on May, spot volume for June only reached $643 billion representing a decline of 49 percent. According to Cryptocompare’s report, spot trading on low-tier and unregulated accounting for $466 billion while the remaining $177 billion happened on what Cryptocompare considers as top-tier exchanges.

“Spot volumes have gradually dwindled throughout the month of June, now representing roughly half of the daily volumes seen in the previous month,” the London-based data analytics firm wrote in a report published on July 6.

But despite its sharp decline in trading volume, the crypto derivatives’ share with respect to the whole cryptocurrency market actually rose compared to previous months. The crypto derivatives niche accounts for 32 percent compared to its 32 percent share in May and 27 percent share in April.

Another surprising trend spotted by Cointelegraph is that regulated options appear to be gaining in popularity among institutional investors. For instance, Bitcoin options volume on the Chicago Mercantile Exchange (CME) rose by 41 percent in June and actually reached a new all-time monthly high with 8,444 traded contracts. While BTC futures fell by 23 percent, June’s figure is still the second-highest for 2020.

Businesses are also busy positioning themselves to cater to their institutional investor clientele. UK-based accounting firm KPMG recently launched a cryptocurrency management platform called Chain Fusion.

“Institutionalization is the at-scale participation in the market by small and large entities within the global financial ecosystem, including banks, broker-dealers, exchanges, payment providers, fintechs, and service providers,” KPMG said in a recent report.

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