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CME Claims Bitcoin Futures Throne Over Binance

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In a major shift, the Chicago Mercantile Exchange [CME] has surpassed Binance to claim the largest share of Bitcoin futures open interest [OI] for the first time in two years, according to data from Coinglass. The regulated CME secured the top position with an open interest of approximately $4.07 billion, outpacing Binance, which recorded an OI of $3.6 billion. Various exchanges, including Binance, offer a range of futures products, such as conventional futures, perpetual contracts, or futures with no expiry.

The ascendancy of CME in open interest not only propelled the regulated futures exchange to the forefront among crypto futures exchanges but also witnessed its cash-settled futures contracts reaching a volume exceeding 100,000 BTC. This surge in trader interest in the Bitcoin futures market has enabled CME to command a 25% share of the market.

Bitcoin
Image Credit: WClementeIII

A significant portion of investments in CME futures have been channeled through standard futures contracts, signaling a notable influx of institutional interest. This heightened interest coincided with BTC experiencing a substantial double-digit surge in October, propelling it to a new one-year high above $35,000.

Bitcoin’s open interest serves as a crucial metric, representing the total number of outstanding Bitcoin futures or options contracts in the market. It acts as a gauge for the capital flowing into and out of the market, with an increase in open interest indicating a bullish sentiment and a decrease suggesting a bearish sentiment.

Bitcoin OI Record Surge

The cryptocurrency landscape continues to draw attention as the open interest in Bitcoin futures contracts reaches an impressive $15.83 billion, marking the highest level since early June 2022. As reported by TronWeekly, this surge in open interest, reflecting a 33.5% increase since October, underscores growing investor confidence in the cryptocurrency market.

Bitcoin futures contracts have emerged as a favored choice for investors seeking exposure to the dynamic yet potentially rewarding realm of cryptocurrencies. These contracts provide traders with the opportunity to speculate on the future price movements of Bitcoin, enabling them to take long or short positions based on their market outlook.

Ethereum’s Next Frontier: Volatility Shares Gears Up for Innovative ETF Launch

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In a bold move that’s set to reshape the landscape of cryptocurrency investment, Volatility Shares has announced plans to launch an Ethereum futures exchange-traded fund (ETF) on October 12. The company submitted a filing to the U.S. SEC on July 28, outlining its intention to introduce an ETF focusing on cash-settled Ethereum futures contracts available on the Chicago Mercantile Exchange (CME).

Notably, this ETF, named Ether Strategy ETF (Ticker: ETHU), will stand as a unique investment vehicle, as it seeks to provide investors with exposure to Ethereum and Ether without directly investing in the cryptocurrency itself. Volatility Shares had already made waves in the crypto ETF space with the successful launch of the first 2x bitcoin-linked ETF (BITX) back in July.

Eric Balchunas, the esteemed Senior ETF Analyst at Bloomberg, took to Twitter to share his insights on the matter. He revealed that Volatility Shares was positioning itself to be at the forefront of the Ethereum ETF race, possibly even launching ahead of the competition, given its track record of strategic moves.

The community has been abuzz with speculation and questions about the approval status of this innovative ETF. Balchunas responded by pointing out that the lack of withdrawals indicated a favorable stance from the SEC. However, he acknowledged that the exact launch date might be influenced by regulatory considerations, as the SEC might prefer to group these launches.

Rise of Ethereum Futures ETFs

Amidst a flurry of activity surrounding cryptocurrency ETFs, this de­velopment eme­rges. Several firms have­ submitted applications for Ethereum future­s ETFs, aiming to seize the growing inte­rest in the market’s se­cond-largest cryptocurrency. Instead of holding the­ underlying asset directly, the­se ETFs would invest in Ethere­um futures contracts traded on the CME.

While excitement abounds, the looming question remains: will the SEC grant approval? The regulatory landscape for cryptocurre­ncies has been unpre­dictable, with increased scrutiny from authoritie­s. Recent efforts to classify most cryptocurre­ncies as securities, e­xcluding Bitcoin, have added an extra laye­r of uncertainty to the industry.

However, Volatility Shares’ upcoming launch of the Ether Strategy ETF (ETHU) marks a significant stride toward mainstream adoption of cryptocurrency in traditional financial markets. As October 12 approaches, all eyes are on whether this groundbreaking ETF will be met with the green light from the SEC, potentially opening the door to a new era of crypto investment opportunities.

Related Reading | Cardano’s DeFi Flourishes, TVL Peaks Over 600M

CME’s New Ether/Bitcoin Futures Product Set To Enhance Crypto Exposure; Here’s How

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CME Group announces Ether/Bitcoin Futures contacts that would go live on July 31 after regulatory approval. With this offering, investors can gain exposure to cryptocurrencies through the leading derivatives exchange without having to adopt a directional viewpoint.

In accordance with the press release, this new contract will help “create opportunities for a broad array of clients looking to hedge positions or execute other trading strategies, all in an efficient, cost-effective manner.”

“Historically, ether and bitcoin have been highly correlated; however, as the two assets have grown over time, market dynamics may affect the performance of one more than the other, creating relative value trading opportunities,” said Giovanni Vicioso, CME Group Global Head of Cryptocurrency Products.

Additionally, the Ether/Bitcoin Ratio futures will also be cash-settled at the value of the final settlement price for CME Group ether divided by the equivalent final settlement price for CME Group bitcoin. The new contract will use the same listing cycle as the CME Group’s futures contracts for Bitcoin and ether.

The majority of market observers have welcomed the announcement favorably, stating that the new investing package may help revive institutional participation in BTC over the coming weeks.

One analyst did predict problems for ETH and BTC, most likely brought on by the “buy the rumor, sell the news” effect. Reacting to the news, Daan Crypto Trades wrote;

If this has an effect similar to the $BTC & $ETH futures back in the day then the release of this instrument could form a pivot for the ETH/BTC pair. Maybe more down into the release and then a reversal around the end of July? Let’s see.

Rise Of New Bitcoin Products

Another responded that the rumor may boost the price of Ethereum. “Wouldn’t make more sense a buy the rumor, sell the news event? So we pump before the end of July Everything is exhausted right now. If BTC pumps through resistance, maybe ETH could catch up.”

Exactly a week ago, the U.S. Securities and Exchange Commission [SEC] approved the first leveraged Bitcoin futures exchange-traded fund [ETF].

Volatility Shares 2x Bitcoin Strategy ETF [BITX] debuted on the Chicago Board Options [CBOE] BZX Exchange on June 27.

Although it might be a bit early to predict the price impact, the news is no doubt encouraging for investors.

Bitcoin A Strong Competitor To Gold, Suggests CME Managing Director

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Bitcoin has been often compared to gold as the king coin entails several properties that mirror that of gold. The store of value aspect, limited supply of 21 million, and several other characteristics have led to a great majority of people touting Bitcoin as digital gold. While many believe that BTC could flip gold, the entire, gold vs BTC narrative has been on for quite a while. Just as the value of the largest cryptocurrency has been surging, an array of people have been steering towards Bitcoin.

The asset recently got an endorsement from SpaceX CEO Elon Musk. Now, CME Group’s Managing Director and chief economist, Bluford Putnam revealed his take on the king coin.

Bitcoin vs Gold Narrative Prolongs

Gold has been an investor’s favorite for the longest time. Bitcoin seems to be taking over that as millennials and Gen Z has been opting for BTC over gold. Speaking about the same, Putnam told Bloomberg that Bitcoin was emerging as a competitor against gold.

Putnam pointed out that the supply of gold is hazy while Bitcoin’s limited supply of 21 million was quite clear and steady. Albeit this, he urged people to be aware of the volatile nature of crypto. CME’s Chief Economist said,

“When the supply is relatively inelastic, then the dynamics of shifting patterns with demand can have very large and abrupt impacts on prices. Bitcoin has illustrated this point.”

He suggested that BTC was on its way to replace gold as a hedge against inflation. While gold has time and stood as a strong hedge during times of unrest in the past. Putnam, however, suggested that the metal may be slipping in terms of its appeal as a hedge, especially against global political risks. He added,

“In the 2017 to 2020 period, the mostly ups and occasional downs of the gold price appear to be directly tied to Fed policy shifts more than anything else. Since equities were responding to the same driving force, the gold-equity relationship tended to become a little more closely associated, weakening gold’s safe-haven appeal.”

Bitcoin Futures Open Interest Skyrockets To $13B; CME Tops Chart

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Bitcoin continued to break new records as it oscillated back and forth a little below $40k. Following the price recovery in the spot market, optimism was also noted across the derivatives sector.

According to the latest stats compiled by Skew Analytics’ data dashboard, aggregated open interest [OI] in Bitcoin futures across the 12 biggest cryptocurrency exchanges surpassed a whopping $13 billion.

With this, OI hit a fresh ATH yet again on the 14th of January as interest in the market continued to soar high.

CME Tops The Chart For Bitcoin Futures OI

Out of the total OI figure, CME Group’s bitcoin futures accounted for $2.39 billion as the platform continued to soar in popularity as more institutional investors flock to the sector.

CME was followed by OKEx with $2.08 billion, Binance with $2.05, and Huobi with $1.04 billion. The once leading derivatives giant BitMEX was in the 8th position on the Skew charts amassing an OI of $0.88 billion.

Unlike CME which went on to become the largest market for Bitcoin Futures, ICE’s crypto venture, Bakkt has been laying low in terms of the OI numbers recording a mere $0.05 billion on the same day.

The latest news comes after a large liquidation event following the biggest price dump of the year. Despite more than $1 billion buy liquidation, the appetite of the futures contract trades appeared to be bullish as depicted by the OI figures. It was clear that the impact of the recent liquidations was in no match for the bullish outlook among the market participants.

Optimism From Professional Traders: Strong Bullish Projection For Bitcoin

The above charts also evidenced more and more inflow of money into the market, as traders expect a near-term rise in the crypto-asset’s volatility which was indeed a positive development for its spot price. Noting the rising optimism, prominent analyst Joseph Young tweeted,

“Bitcoin futures open interest is back to an all-time high once again. Open interest = the sum of all futures contracts in the market. When the market crowded, massive price swings like the Jan. 12 20% drop become more likely. Another flush drop above $42k could happen again.”

Ethereum Breaches $735 Triggering Over 90% Addresses In Profit

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Late Chrismas Gift for Ethereum?

Ethereum had a bullish start for the day as it broke above $700 for the first time since the last week of May 2018. The largest altcoin was seen lacking bullish momentum as its price movement broke away from that of Bitcoin. However, Ethereum soon climbed to $735.93, at the time of writing after multiple pullbacks close to the coveted level.

According to the crypto-analytic platform, Glassnode, the latest surge triggered 90% of all Ethereum addresses [which roughly amassed for 47 million addresses] holding ETH are now in a state of profit. The last time this number was witnessed to be this high was back in January 2018.

The infamous Black Thursday crash is worth noting in this context because Ethereum has come a long way since then. In March of this year, only 3.2% of all ETH addresses were in profit as opposed to 90% following the spectacular price rise right after Christmas.

Here’s what Messari’s Ryan Watkins has to say about the latest uptrend:

“2021 prediction: In 2021 we begin seeing institutions buy $ETH. Once you accept that Bitcoin may be valuable, it opens your mind to the possibility that other cryptoassets may also be valuable. It’s a much easier jump from $BTC to $ETH from there.”

While Bitcoin continued to be the darling of institutional investors and corporations, Ethereum was not far behind either. Amassing a market cap of $83 billion, Ether’s success story among institutional investors can be attributed to strong fundamentals. Especially, the decentralized finance [DeFi] sector happened to be one of the hottest and the most exciting thing in the cryptocurrency industry this year.

This helped the second-largest network to hold on to the leadership status as the enormous majority of DeFi projects were based on the Ethereum blockchain. In addition, the growing network activity, in turn, led to increased ETH transaction fees and strong demand for the underlying token.

The growing conviction around Ethereum as an asset class was witnessed this year. This was further evidenced by the Chicago Mercantile Exchange’s [CME] announcement of an upcoming launch of a futures contract on Ether in February 2021. This development was touted as a game-changer for the ETH ecosystem.

To top that, the Grayscale Ethereum Trust [ETHE] registered over $1.7 billion in assets under management [AUM]. It was also found that the shares of ETHE [OTCMKTS: ETHE] had surged by 700% YTD. This has also intensified the bullish outlook as many market participants now believe that once the Bitcoin rally subsides, there will be a capital inflow into altcoins with ETH being the first choice of high-profile investors.

Binance, CME Bitcoin Futures Hits Fresh High As BTC Flirts With $20K

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Bitcoin’s short-lived stint with the $19,348-level has triggered immense volatility not just across the spot market but also in the derivatives space of the cryptocurrency realm. As it geared up for retaking its previously established peak, trading volume figure on one of the world’s leading cryptocurrency exchange, Binance surged substantially.

What’s more, Bitcoin Futures open interest [OI] has also increased to record-setting heights on the platform. The figures climbed to a fresh all-time high of about $1.2 billion as the bullish momentum of the cryptocurrency continued. With this, Binance now holds approximately a quarter of the value of the Bitcoin futures market, which currently stood at $4.1 billion.

Over the past month, Bitcoin futures aggregated trading volume has been higher than its previous months, thanks to the renewed optimism among the market participant prompted by the latest bull run. Notably, Binance’s figures saw tough competition from yet another cryptocurrency exchange and derivatives platform OKEx.

 

Bitcoin Futures Figures Breaking Record Across Platforms

As Bitcoin flirted with a new high, a more sophisticated product, Chicago Mercantile Exchange [CME] also witnessed its Bitcoin futures figures spike to fresh peaks surpassing high June-July levels. The daily trading volume rose to an ATH of $1.8 billion. The previous high of $1.5 billion was recorded on the 23rd of November during which Bitcoin being traded at $18.3k.

According to the latest Skew charts, CME’s open interest also recorded its highest level at $1.2 billion.

This comes amid a massive surge of institutional capital inflows to the world’s leading cryptocurrency and its derivatives markets as billionaires and institutional investors were warming to the digital asset. Hence, these trends evidenced that not just retail but also new institutional investors were seeking exposure to Bitcoin.

Several experts have noted that the current rally was catapulted by the increasing investment from not only institutional investors, investment banks but also more importantly payment companies. This included popular giants in the payments realm such as PayPal and Mastercard as they launched crypto offerings for their huge userbase this year.

Bakkt Bitcoin Futures Records 36% Increase In Daily Volume Since Previous ATH

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Bitcoin Futures, have managed to amass immense traction across the globe. While several platforms have begun exploring the prospects of Bitcoin Futures, the existing ones continue to score big. Prominent crypto asset custody platform, Bakkt recently revealed that it had quashed its own record for Bitcoin Futures Trading Volume.

Still Behind CME

Intercontinental Exchange’s [ICE] crypto derivatives platform, Bakkt, revealed on Twitter that it had recorded a new high in Bitcoin Futures volume. The platform nearly accumulated a total volume of $200 million surpassing its previous record by 36%. The tweet read,

“Another record day in the books for our physically delivered futures:

15,955 Bakkt Bitcoin Futures were traded today, representing over $200M of volume and a 36% increase from our previous all-time high”

Bakkt’s previous all-time high was about $125 million, where a total of 11,706 Bitcoin Futures were traded on 28 July 2020.

Back when ICE announced the launch of Bakkt, challenging the already well established Chicago Mercantile Exchange [CME], the fervor around the project left the crypto community with high expectations for the project. Even though investors considered Bakkt as a catalyst for Bitcoin’s potential bull runs, the platform did not spiral as expected. Bakkt witnessed dainty gains compared to other projects. The latest instance substantial proof of the same.

Today, as Bakkt recorded its latest all-time high of $200 million in volume, CME went on to bag $262 million in volume. The highest Bitcoin Futures volume, CME has recorded was about $1.1 billion. The disparity between these two platforms questions the “competitor” tag that they have been given.

CME wasn’t the only platform that overtook Bakkt, prominent cryptocurrency exchanges like Binance, Huobi as well as OKEx were seen recording increased value. Malta-based Binance recorded trade worth, $2.65 billion over the last 24-hours for BTC-USD perpetual contracts. Huobi garnered a total of $1.28 billion via its BTC/USD perpetual contract.

Crypto Derivatives Volume Soar to Fresh ATH in August; Catalyzed by Bitcoin’s Rally Above $12,000

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While the lack of positive jurisdiction may have driven the cryptocurrency industry into a gray area, but the derivatives sector has come to the rescue. It has undoubtedly driven a new cycle of crypto adoption.

The crypto industry has seen developments on various fronts and thanks to the foray of many institutional investors, space has matured significantly from narratives such as ‘Wild West’ or another ‘dot-com bubble’.

Over the past few years, crypto derivatives have played an important role and this was evident in its soaring trading volumes. According to the latest Exchange Review report by CryptoCompare, derivatives volume has soared to a fresh all-time high in August.

Trading volumes of derivatives surged by a staggering 53.6% in August driving the figures to a massive $711.7 billion. With this, the trading volume surpassed the previous high of May when it registered $602 billion in monthly volumes.

Along with the derivatives, volumes for spot also increased by 49.6% taking its figures to $944.9 billion in August. Interestingly, this month saw a period of high volatility coupled with Bitcoin’s price movement climbing to the 2020-peak above $12,300. This could have potentially triggered the surge of trading volume as trading activity in derivatives as well as their underlying cryptocurrencies intensified.

This was a promising sign of the market maturing as institutional investors remained overall optimistic despite several pullbacks.

Besides, derivatives exchanges also saw a significant increase in trading volume in August, according to the report. Huobi dominated the chart with a trading volume of $208.5 billion after rose by 44.7%.

Next in the line was OKEx, which was up by 69.1% and reported a volume of $190.8 billion following Binance with $184.6 billion volume traded after surging by 74% in August. In addition, BitMEX traded $72.5 billion and registered an increase of 43.6%.

The report further noted,

“Trading activity remained high in August compared to July. The top 4 exchanges Huobi, OKEx, Binance and BitMEX represented 90% of the volume traded throughout the month.”

Monthly CME futures contract volumes have also noted a substantial uptick of 36.3% since July as it touched 203,867 contracts traded in August. Additionally, another institutional investing platform, Bakkt recently surpassed its highest-ever figure of $147 million in volume with 12,791 contracts traded on 25th August as previously reported by TWJ.

Bakkt Volume Smashes Previous Record, Hits New ATH at $147 Million

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Almost a month after breaking its record twice in two consecutive days, volumes on Bitcoin futures offered by Intercontinental Exchange [ICE] subsidiary, Bakkt, hit yet another milestone.

The institutional investing platform registered its highest-ever figure of $147 million in volume with 12,791 contracts traded on 25th August, as per the data from the crypto-analytic site, Skew. As compared to its previous high in July for Bitcoin’s monthly futures, Bakkt’s figures were up by 15%.

On the other hand, the open interest [OI], which is an indicator of the total number of outstanding contracts held by investors, declined and was found to be at $9.5 million. This may be due to the fact that the latest move followed a correction in the underlying asset price that plunged to $11,397 as opposed to its previous high, which was driven by Bitcoin breaking the almost three-month range-bound trading channel.

Bakkt’s physically-settled contracts which are paid out in BTC registered a volume of $134 million while its cash-settled contracts, which are delivered in US Dollars, accounted for $13 million.

However, New York Stock Exchange-owned Bakkt wasn’t the only institutional exchange that recorded a new peak. Its rival, Chicago Mercantile Exchange [CME] also saw nearly a month-high surging to a volume of $935 million while its open interest was found to be at $713 million, according to data from Skew Analytics.

Leading cryptocurrency exchange and derivative platform, OKEx‘s ‘BTC Top trader sentiment index’ also spiked to 0.59 as volumes rose to $4.5 billion despite a low open interest. However, these figures were still negligible when compared in a macro aspect of the derivatives market.

The aggregated daily volume of the collective derivatives platform, as noted by Skew, suffered from poor figures in August. It continued to remain below $20 billion for the most part of the month since the underlying asset’s price sustained major corrections and failed to breach $12,000 despite multiple breakout attempts.

However, with the latest surge, the aggregated daily volume also rose, though not significantly, to $17 billion, a level that was last seen on 19th August when Bitcoin’s price soared to $12,278. Could this spur a rally for Bitcoin in the near-term?