The big institutional investors are moving toward holding Bitcoin in “physical” form rather than cash-settled futures, as per a recent official analysis report from cryptocurrency derivatives exchange ZUBR. Such investors also are undeterred by the volatility of the leading cryptocurrency by market capitalization – and think about holding onto the asset within the future, the report adds.
The report, “Institutional Investors Turn ‘Hodlers’ on Bitcoin Futures Markets,” revealed last week, adds that the institutional investors [those that invest money on behalf of others, like hedge funds] are counting on regulated exchanges to urge involved in Bitcoin derivatives.
Derivatives are tradable securities or contracts that derive their value from an underlying asset. They need frequently been employed by institutional investors, and therefore the existence of Bitcoin derivatives might help draw more of those investors to the cryptocurrency ecosystem.
Within the world of Bitcoin derivatives, “physical form” means Bitcoin itself is going to be delivered to the investor – rather than a cash settlement in fiat, like USD & Euros.
“It’s however clear that there’s increased demand from institutions like banks & hedge funds to execute on regulated exchanges,” CEO ZUBR CEO, Ilgar Alekperov, added within the report. “A completely regulated marketplace keeps both institutions and retail investors safe & secure, along with pushing the venues to offer efficient & consistent service.”
Within the past few years, Bitcoin futures trading volumes hit over $4 trillion, consistent with the report. The surge in interest in Bitcoin investment is especially seen on the Chicago Mercantile Exchange [CME] as well as on Bakkt, a cryptocurrency derivatives firm being operated by the Intercontinental Exchange – both observing high trading volumes within this year.