Traditionally, the markets and even banking institutions all over the world have timings which record the opening and closing price of an asset. The asset may be a currency, commodity or equity. The timings wary all around the world but they are all recorded with a certain level of accustomization at the moment.
On the other hand, Bitcoin [BTC] and cryptocurrency markets run 24/7 and the price fluctuations can happen anytime. This discrepancy has created two huge gaps in the Futures contract on Bitcoin [BTC] from the closing on Friday to the opening on Monday.
According to a recent estimation by Bitwise, the market share of the futures contract is considerable compared to the actual volume on spot exchanges like Binance and Bitstamp. The Bitcoin [BTC] Futures contract expired for the month of May on 31st. The new contracts will be traded on Monday.
Moreover, Mati Greenspan, the Senior Market Analyst at eToro noted this fact in a recent blog post. He said,
“The CME bitcoin futures contract for May is set to expire at 4:00 PM in London today and, with more than $8 billion worth of volume traded so far, it’s going to be the biggest one ever… Traders on the CME could be hedging their positions with real BTC holdings elsewhere.”
Furthermore, he also mentioned that although the contracts expire today, the final settlements will be made on Monday. Since the final cash settlements will occur on Monday, currently at the expiration the short positions are transferred to the long holders. On Monday, the traders will choose to either opt for a cash settlement or to continue their contracts.
The weekend hence provides an opportunity for futures contracts holders to gain advantage from the price action during the weekend. Nevertheless, the price was fixed today. Mati Greenspan noted about what could affect the price during this weekend.
What could affect the price though are hedge positions. Traders on the CME could be hedging their positions with real BTC holdings elsewhere.
Hence, the weekend could go on a quiet roll. However, the time-frame presented to the futures traders calls for significant price movement.
Do you think this will be an exciting weekend for Bitcoin or it will go quiet? Please share your views with us.
Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com