Bitcoin BTC/USD and Ethereum ETH/USD derivatives trading volumes in dollar terms continued to soar in February and the increase comes as spot volumes continue to rise amid a hot regulatory backdrop.
What Happened: The growth in trading activity is indicative of the growing interest in cryptocurrencies as an asset class, despite the volatility and regulatory uncertainties, according to data from The Block's data dashboard.
Bitcoin futures and options trading volume rose by about 13% in February, reaching $791 billion across all exchanges, up from $697 billion in January.
Options volume also increased to about $20 billion from $17.7 billion in January, and Bitcoin options open interest reached an all-time high in February, crossing $1 billion for the first time.
Meanwhile, Ethereum's futures and options volumes rose 2% and 30%, respectively.
February marked several milestones in crypto derivatives, notably on a regulated platform.
Ethereum options volume on the Chicago Mercantile Exchange (CME) reached its highest level since its inception last year.
Options on the exchange went live in August of last year, and volumes increased for two months through October before dropping to close out the year. Volumes then soared in January with the momentum carrying over into February.
Interest in Crypto Derivatives Grows: The total number of outstanding contracts that are yet to settle continues to grow, signaling continued interest in cryptocurrency derivatives.
Commentators speculated institutional crypto traders are avoiding unregulated or semi-regulated platforms following the collapse of FTX, opting instead for platforms that are clearly regulated.
The regulatory environment remains hot and traders and investors are still waiting for more guidance, according to Laura Vidiella, VP of business development at LedgerPrime.
Despite the benefits of physical settlement, traders have been moving to the CME, which only offers cash settlement.
Why It Matters: As more institutional investors enter the crypto space, trading volumes are expected to continue to rise, and the demand for regulated platforms is likely to increase.
The regulatory landscape does remain uncertain, and investors and traders will need to stay vigilant and informed to navigate the market successfully.
Read Next: Alpha Sigma And Transform Ventures Merge To Create Game-Changing Crypto Investment Fund
Photo: Sorapop Udomsri via Shutterstock
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