A massive surge in cryptocurrency derivative trading shows that institutional interest in the crypto market is again going up. The crypto derivatives volume increased by 32% in May in comparison with the previous month.

On Thursday, June 4, London-based cryptocurrency data aggregator CryptoCompare released a new report showing that cryptocurrency derivatives volumes increased by a massive 32% topping $602 during the last month of May. As per the report, only three cryptocurrency exchanges Huobi, Binance, and OKEx contributed 80% of the total activity of derivatives. Huobi alone contributed $176 billion in volume showing a rise of 29% from April. OKEx and Binance followed with $156 billion and $139 billion respectively. In May 2020, the total monthly volume topped at $602 billion beating its previous record of $600 billion in March 2020. This also shows that the Bitcoin trading volume has recovered from the crypto market crash of March.

Also, according to the CryptoCompare report, there was a notable increase in the activity around crypto options. In May, the total monthly option contracts traded on CME were 5,986, 16x more than April. Besides, CME’s Futures contracts also shot up by 36% reaching a total volume of 166,000.

The volume of Deribit options contracts nearly doubled to $3.06 billion last month. Just before the Bitcoin halving on May 10, trades worth $196 million passed through the Deribit exchange. This turned out to be the single biggest day in the exchange’s four-year history.

Speaking to Decrypt, CryptoCompare’s Head of Research, Constantine Tsavliris, said:

The uptick in derivatives volumes “may signal interest in digital assets from a more sophisticated class of investors. While the largest exchanges that operate in the spot markets have more or less been established for quite some time, less established derivatives players such as Binance have seen growth in volumes month on month.”

Spot Exchanges Also See a Rise
Last month, the spot volumes also rose by a total of 5%. The spot trading still remains as one of the most popular ways of trading cryptocurrencies as these exchanges process a total monthly volume of $1.27 trillion. This is around 32% of the market’s total volume.

Just like the crypto options volumes, the ones for spot exchange also spiked on May 10, a day before the halving. Over the month of May following the halving, there was also some activity of Bitcoin dumping reported. The trading volumes crossed around $65 billion and most of the trading took place on exchanges that CryptoCompare thinks were low in quality. Tsavliris said:

“In general, lower-tier exchanges tend to be far less regulated than top tier exchanges, offering mainly crypto to crypto markets. As a result, they have fewer KYC restrictions and quite often offer lower fees than other top tier exchanges.”

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