CME’s notional open interest has surged to $3.57 billion, securing its position as the second-largest exchange in the trading of standard Bitcoin and perpetual futures. The Chicago Mercantile Exchange (CME), a regulated entity, is ascending the ranks among the largest…
CME’s notional open interest has surged to $3.57 billion, securing its position as the second-largest exchange in the trading of standard Bitcoin and perpetual futures.
Notional open interest is defined as the U.S. dollar value tied to the number of active or open contracts.
Binance, an offshore unregulated exchange, continues to dominate the market with a notional open interest of $3.85 billion, which is about 8% higher than that of CME.
However, CME has recently achieved a milestone by surpassing 100,000 BTC in open interest for its cash-settled futures contracts for the first time. Additionally, CME’s market share in the Bitcoin futures sector has reached an all-time high of 25%.
Most of the open interest on offshore exchanges is concentrated in perpetual futures, which are unique in that they have no expiration date and employ a funding rate mechanism to align with the current spot price.
Retail investors have also contributed to this trend. Data from Matrixport shows that the rolling five-day volume in ProShares’ leading Bitcoin futures ETF soared by an astonishing 420% to $340 million last week. This ETF primarily invests in CME Bitcoin futures.
Analyst says CME ascent signals fading bearish views
André Dragosch, the head of research at Deutsche Digital Assets, offers a different perspective. He argues that CME’s growth is more likely due to the unwinding of bearish positions on offshore exchanges rather than an increase in long futures positions.
Dragosch notes that although CME’s share in Bitcoin futures open interest has risen, the overall amount of Bitcoin futures and perpetual open interest has not seen a significant uptick in Bitcoin terms.
This suggests that the recent price surge may be more attributable to a short squeeze and a decrease in aggregate open interest.
The market is also buzzing with anticipation over the potential approval of a Bitcoin spot ETF, which has further driven up Bitcoin’s price.
Earlier this month, BTC rallied toward the $35,000 mark, largely due to market speculation surrounding the spot ETF.