JP Morgan - CME Group’s Bitcoin Options May See Solid Response

Bitcoin Futures BTC  USD Performanc


Since CME Group Inc. announced the launch of bitcoin-contracts for 13 January 2020, reputed investment banking company, JP Morgan has observed high interest from institutions, and the market estimations of the public interest seem to point in the same direction.

It was reported last month that Bakkt and its New York Stock Exchange parent, Intercontinental Exchange Inc., started offering options.

Given CME's dominance in trading Bitcoin futures on regulated exchanges, it is expected this new offering may change things.

"This unusually strong activity over the past few days likely ref lects the high anticipation among market participants of the option contract", Panigirtzoglou wrote.

Panigirtzoglou also went on to write that there has been an increase in the activity for the underlying CME futures contract over the past few days and that the open interest has increased 69% since the end of 2019, and also that the number of large open-interest holders has grown.

Going by the report, the issuance of Bitcoin contracts has been unstable in terms of performance considering the past record.

Bitcoin was up 2.1 per cent to $8,209.42 as of 11am in Hong Kong, according to Bitstamp pricing, near its highest levels since mid-November.

"The gap has not yet fully closed, suggesting some downside risk remains", said JPMorgan strategists led by Nikolaos Panigirtzoglou (MD for Global Market Strategy) in a note published Friday, as reported by Bloomberg.

Bitcoin's intrinsic value (an estimate of the actual true value) is still below market price, according to JPMorgan.

Since last week, the price of Bitcoin has risen 15% and the volume, according to one report from a cryptocurrency research firm, has almost doubled, boding well for bulls if momentum can be maintained. JPMorgan calculates the intrinsic value of BTC by treating the world's leading cryptocurrency as a commodity and taking its marginal cost of production into account.

Oscars 2020: Nominations announcement under way