Effect of CME Futures Options on BTC Price Depends on Halving

CME Bitcoin options is a net positive for cryptoSpeaking to Cointelegraph, cryptocurrency technical analyst Eric Thies said that CME options will bring in more stability in the market over the long run.

In the short term, the options market is unlikely to have any significant impact on the price trend of Bitcoin.

For short-term price movements, margin trading platforms, like BitMEX and Binance, will have a stronger effect on the price of Bitcoin.

"We're pleased our CME Bitcoin futures have rapidly evolved over the last two years to become one of the most liquid, listed Bitcoin derivatives products in the world, averaging nearly 6,400 contracts traded each day in 2019.".

For CME, Bitcoin futures and derivative products are established revenue streams for the company, and it indicates that there is enough demand from investors for CME to continue focusing on the cryptocurrency market.

On Jan. 21, Cointelegraph reported that the CME Bitcoin options volume doubled to $5.3 million merely seven days after their launch.

How rising demand for institutional Bitcoin products plays in with BTC halving approachingAccording to Alistair Milne, the chief investment officer at Atlanta Digital Currency Fund, the upcoming Bitcoin block reward halving in May 2020 is not priced into the price of Bitcoin.

As the increase in the volume and open interest of CME's futures and options markets show, the institutional demand for Bitcoin is already on the rise.

Whether the high demand for Bitcoin futures and options products throughout the past three months indicate that institutions are anticipating the halving have an impact on the price of BTC remains to be seen.

The argument in favor of the halving affecting the Bitcoin price in the medium term has been that any event that impacts the supply of an already scarce asset in Bitcoin can have a significant effect on the price trend of BTC.The options market alone may not have enough volume or total open interest to sway the Bitcoin price.