Chicago Mercantile Exchange (CME) Closes on Binance in Bitcoin Futures Exchange Volume

The Chicago Mercantile Exchange (CME) is closing on the leader’s Binance in Bitcoin Futures transacted. With the realization of $3.54B in notional open interest (OI), CME now ranks second among the largest platforms in bitcoin futures exchange.  

The leap to second rank follows the surge in notional open interest to realize over $3.54 billion on CME. The accomplishment positions the regulated CME to second rank among the exchanges that offer trades in the standard bitcoin and perpetual futures. 

Chicago Mercantile Exchange Rise Fuelled by Institutional Purchases

The market analysts are split on the CME’s rise, which shows increased institutional purchases. The analysts acknowledge that the rally attained by the CME on the list of platforms with the largest Bitcoin futures and perpetual futures exchanges is linked to open interest replicating the move witnessed in the early phases of the 2020-21 bull run. 

The CME realized $3.54B OI to leap from fourth position to second in the bitcoin futures exchange, as per Coinglass. The notional genuine interest involves the dollar value locked within the active and open contracts. 

A review of the CoinGlass data shows the offshore unregulated exchange Binance retained the top spot with $3.83 billion in open interest. The figure represents 8% higher than the $3.54 billion realized by CME.

The event that CME retains higher than the 8% growth would readily dethrone Binance from the top spot. Such is likely particularly with the series of lawsuits gradually eroding its reputation would chase away several conscious investors. Also, the allegations of Binance failure to avert illicit funds transfer to sanctioned Hamas further dents its reputation to the advantage of CME.

Further scrutiny shows that open interest traced to the cash-settled futures contract in CME recently exceeded 100,000 Bitcoins for the initial time. Simultaneously, the CME’s share within the BTC futures market rose steadily to an all-time high of 25%.

The standard Bitcoin futures contract is estimated in CME as equivalent to 5 Bitcoins. The microcontract is typically one-tenth of a bitcoin. 

Further review of the standard ether futures indicates they carry a contract size equivalent to 50ETH. The micro futures carry an equivalent of one-tenth of ETH. 

The CME shows that most of the open interest within the offshore exchanges portrays concentration within the perpetual futures, unlike conventional futures contracts. Perpetuals are identified as futures that lack expiry and typically utilize the funding rate mechanism to ensure syncing with the spot price. 

A contingent of market observers attribute CME’s recent ascent to signal an institutional-fueled rally. It coincides with the Bitcoin uptrend estimated at 27%, as per CoinGecko data. The rally is fuelled by the macroeconomic uncertainty and increased optimism about spot ETF approval by the Securities and Exchange Commission (SEC). 

Retail Investors Collectively Sustaining Uptrend Observable in Futures-based ETFs

Market observers hail the collective input of retail investors, particularly in triggering and sustaining the uptick observed in the futures-based ETFs. In particular, a review of five-day volume within the ProShares’ top-ranked bitcoin futures ETF indicates a 420% increase. As such, the surge catapulted the weekly volume to $340 million, per Matrixport data. The sharp increment is unsurprising considering that the ProShares ETF investments are concentrated in CME Bitcoin futures that also realized a sharp uptrend.

The Deutsche Digital Assets research executive André Dragosch offered a contrasting view. Dragosch data portrays rising results for CME from the unwinding bearish bets on the offshore exchanges. Further analysis of CME shows its share in the Bitcoin futures OI increased compared to other exchanges. 

The aggregated amount of Bitcoin futures and perpetual OI hardly increased in Bitcoin terms. He observed that long futures positions barely participated in fueling the recent surge. Instead, Dragosch attributed the price spike to the induced short squeeze, reducing aggregate open interest.