As per JPMorgan Chase & Co., the biggest bank in the United States, Bitcoin futures might be holding more significance than it is credited for in the present digital currency market.
According to the recent reports presented by Bitwise, digital currency asset manager, along with the Blockchain Transparency Institute suggest that out of the total reported trading, only a small percent is authentic. Consider the scenario of May trading where out of the 725 billion dollars, if only about 5% was genuine then Bitcoin’s actual trading volume on digital currency exchanges would be anything about 36 billion dollars for that month. The analysis was presented through a report by JPMorgan strategist team under the leadership of Nikolaos Panigirtzoglou utilizing the data registered by CoinMarketCap.
The company further stated that comparing those figures with a projected aggregate volume amounting to 12 billion dollars on the Cboe and CME futures contracts itself is a jump from 5.5 billion dollars recorded in April as well as 1.8 billion dollars recorded as a monthly average from the current year’s 1st quarter.
It implies that the value of the futures market which is listed has been underrated to a great extent, according to Panigirtzoglou. He also wrote that Bitwise’s report goes on to credit the futures which have been traded as a key development facilitating short exposures which let arbitrageurs properly engage in arbitrage. It also said that April and May witnessed a sharp increase in spot BTC volume’s futures shares.
It must be noted here that Bitwise had previously submitted a report in the month of March with the Securities and Exchange Commission of United States which said that some crypto exchanges indulge in inflating their trading volumes so that they can secure a higher ranking. That’s because a higher ranking plays a vital role in terms of attracting more users as well as generating fees. Even CoinMarketCap somewhat agreed to it saying that the inaccuracy concerns regarding the data are valid.
Citing exchanges’ inflated trading volumes and understatement of listed futures’ significance together indicate that possibly the market structure’s greatly changed since the earlier Bitcoin price spike noted at the end of 2017 with an increasing influence from the institutional investors, states JPMorgan.