Who trades bitcoin futures and why?

Using regulatory data with identifiers, we analyze the traders active in the Bit- coin futures (BTC) contracts traded on the Chicago Mercantile Exchange (CME). We find two primary trader types, those who hold almost exclusively BTC (con- centrated traders) and those who hold BTC to diversify a broad...

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Bibliographic Details
Published in:Global finance journal 2023-02, Vol.55, p.100778, Article 100778
Main Authors: Ferko, Alex, Moin, Amani, Onur, Esen, Penick, Michael
Format: Article
Language:English
Subjects:
Bitcoin
Bitcoin futures
Concentrated traders
Cryptocurrency
Diversified traders
Micro bitcoin futures
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Summary:Using regulatory data with identifiers, we analyze the traders active in the Bit- coin futures (BTC) contracts traded on the Chicago Mercantile Exchange (CME). We find two primary trader types, those who hold almost exclusively BTC (con- centrated traders) and those who hold BTC to diversify a broader futures portfolio (diversified traders). The prevalence of these two types changes over time. We also study how BTC markets are connected to other futures markets through common holdings of BTC traders. Finally, we analyze the micro BTC contract and find that the trader composition is different than that of the full-size contract.
ISSN:1044-0283
1873-5665
DOI:10.1016/j.gfj.2022.100778