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Open Interest on CME Bitcoin Futures Hits All-Time High, Signals Further Bullishness
CME bitcoin futures open interest reaches all-time high, driven by active and direct participants - K33 Research.
Updated Oct 21, 2024, 6:13 p.m. Published Oct 16, 2024, 10:15 a.m.
- Bitcoin futures open interest on the CME exchange has hit an all-time high of 172,430 BTC ($11.6 billion).
- Over the past five trading days, CME bitcoin futures have seen an increase of 25,125 BTC, marking one of the highest recorded changes in recent years.
Bitcoin futures open interest (OI) on the Chicago Mercantile Exchange (CME) has hit a new all-time high of 172,430 BTC ($11.6 billion).
On Tuesday, CoinDesk reported that cash-margin open interest reached a new all-time high, with CME accounting for 40% of the total. Open interest refers to the number of open or active futures contracts at any given time.
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In the past five trading days, CME has seen open interest ramp up by 25,125 BTC. This is one of the highest levels recorded over a five-day period in recent years.
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The last time we saw such a build up was June 2023 (26,525 BTC), which coincided with the BlackRock filing for the spot bitcoin ETF, iShares Bitcoin Trust (IBIT). During this period bitcoin surged from approximately $25,000 to $30,000.
Then, in October 2023, CME saw the addition of 25,115 BTC, which coincided with CME becoming the largest futures exchange for the first time, overtaking Binance. Once again, in this period, from October to year-end bitcoin rose from approximately $25,000 to over $40,000.
Vetle Lunde, senior analyst at K33 Research, also pointed out this milestone and explored which cohort is driving this growth.
Lunde notes that active and direct market participants are driving this growth on the CME, and it's not coming from futures-based ETFs such as ProShares Bitcoin ETF (BITO).
"The growth is clearly driven by active/direct market participants - not inflows to futures-based ETFs".
The chart below by Lunde, shows a breakdown of open interest by cohort on the CME. Active and direct participants currently hold 85,623 BTC a similar amount to what was held in March when bitcoin reached it's all-time high.
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However, the 1x leveraged ETF has steadily declined throughout the year and holding just 31,752 BTC. While, the 2x leveraged ETF, which saw a significant surge in March has only experienced slight growth since then. This suggests speculation and leverage were key drivers in the early part of the year, but are no longer the primary drivers in the current market.
Lunde notes that the activity is structured around the November expiry, following the U.S. election.
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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
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- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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