Bitcoin trading by institutions doubled this year on Binance

Institutional client sign-ups and trading volume in the crypto industry are increasing rapidly in 2020, according to Binance, Houbi, and the Chicago Mercantile Exchange (CME).

Widely regarded as a holy grail for the crypto markets, institutional engagement has been slow in coming. However, three exchanges that shared their institutional data with Decrypt have noted a significant uptick in engagement, both on the spot side and the derivatives markets.

Volumes on spot markets more than double

Binance reported a dramatic surge in its institutional client volumes on the spot side. Volumes more than doubled in the first quarter of 2020—growing by 113% compared to the previous quarter.

The exchange also noted that institutions are signing up at a faster rate. “The number of new institutional clients onboarded in 2020 Q1 was 47.4% higher than in 2019 Q4,” a Binance spokesperson told Decrypt.

Binance now claims to have over 3,000 institutional clients across the board.

92% of institutional investors still leave their funds in exchanges

Huobi is similarly pulling in the bigger players, with spot trading volume increasing by 133.71% year-on-year. As of Q1 2020, Huobi cites $101.1 billion in institutional trading volume. It’s in stark contrast to its average quarterly trading volume in 2019, which stood at a comparatively diminutive $43.2 billion.

Derivatives flying high

On the derivatives side, Binance reported that institutional client volumes have soared, quadrupling by 217% quarter on quarter.

For Huobi, institutional trading volume in the derivatives market stood at $343.8 billion in Q1 2020, increasing by 171.16% compared with its average quarterly trading volume of $126.7 billion in 2019.

The CME reported similar numbers, albeit to a slightly lesser extent than its crypto counterparts. The exchange—which deals exclusively in futures and options trading for a majority institutional crowd—relayed a 24% boost in average daily Bitcoin futures volume in May 2020, compared to a year prior. 

The CME's average daily bitcoin futures volume Image CME
The CME’s average daily Bitcoin futures volume. Image: CME

Moreover, according to the CME, average daily volumes hit 8,716 contracts in May (the equivalent of 44,000 bitcoin)—a 50% increase from April. 

While the spike in institutional interest could bolster Bitcoin’s narrative as a macro hedge in the face of this year’s economic turbulence, the specific reason for the spike remains unclear.

Original Source: Decrypt Bitcoin trading by institutions doubled this year on Binance