CME‘s notional open interest (OI) has surged to an impressive $3.54 billion, marking a significant move up the ladder. From its previous fourth position, it now stands as the second-largest Bitcoin futures exchange, trailing only Binance, the unregulated offshore giant, with an open interest of $3.83 billion, maintaining a slight lead.
The CME’s Growing Influence
CME‘s influence in the Bitcoin futures market is expanding at a remarkable pace, mirroring the early stages of the 2020-2021 bull run. Notably, the open interest in CME’s cash-settled futures contracts has broken the 100,000 BTC mark, an all-time high. CME’s share in the BTC futures market has also reached a new record at 25%.
CME offers both standard and micro Bitcoin futures contracts. The standard contract represents 5 BTC, while the micro contract is sized at one-tenth of 1 BTC. This variety caters to a diverse range of market participants.
The Debate: Institutional Rally or Bearish Bet Unwinding?
Analysts are divided on the driving force behind CME‘s ascent. Some see it as a sign of increased institutional involvement in the ongoing Bitcoin rally, which has seen a 27% surge amid economic uncertainty and growing optimism around spot ETFs.
Retail investors have also made their presence felt, as evidenced by the rising trading volume in futures-based ETFs. ProShares’ leading Bitcoin futures ETF experienced a 420% increase in rolling five-day volume to $340 million last week. Notably, this ETF invests in CME bitcoin futures.
However, André Dragosch, Head of Research at Deutsche Digital Assets, offers an alternative perspective. Dragosch suggests that CME‘s ascent may be linked to the unwinding of bearish positions on offshore exchanges, challenging the notion of an entirely institutional-led rally.