The Chicago Mercantile Exchange (CME) has become the second largest bitcoin futures exchange with $3.54 billion in notional open interest, just behind Binance‘s $3.83 billion. This recent development, coupled with the fact that CME’s cash-settled futures open interest surpassed 100,000 BTCs for the first time, has resulted in CME securing a record 25% share of the BTC futures market.
These figures indicate a significant shift from retail to institutional traders in the cryptocurrency market, with CME and Binance vying for dominance in the bitcoin futures open interest market. Although Binance, a global cryptocurrency exchange, has a slight lead with over 28% market share compared to CME’s 26%, the competition is fierce. The total number of open futures contracts represents an investment of 400,000 bitcoins, with Binance leading with 113,419 bitcoins and CME closely following with 103,075 bitcoins.
Standard and micro bitcoin futures contracts on the CME represent 5 BTC and one-tenth of a BTC, respectively. Some observers see this rise as an institutional-led rally. André Dragosch of Deutsche Digital Assets attributes it to the unwinding of bearish bets on unregulated offshore exchanges.
The role of retail investors is also evident in this scenario. Volume in the ProShares bitcoin futures ETF jumped 420% last week to $340 million, according to data from Matrixport. Amid macroeconomic uncertainty and optimism surrounding spot ETFs, bitcoin has seen a significant 27% surge this month. The majority of open interest on offshore exchanges is concentrated in perpetual futures.
This escalating competition between Binance and CME underscores the growing institutional interest in cryptocurrency markets and the evolving dynamics of bitcoin futures trading.
