Bitcoin Futures Surge: CME Reports $11.6 Billion Open Interest
Bitcoin futures open interest (OI) on the Chicago Mercantile Exchange (CME) has surged to an all-time high of 172,430 BTC, equivalent to approximately $11.6 billion. This significant increase was reported by CoinDesk on Tuesday, highlighting that cash-margin open interest reached unprecedented levels, with CME accounting for 40% of the total open interest in the market.
Recent Trends in Open Interest
Over the past five trading days, CME has witnessed an increase in open interest of 25,125 BTC, marking one of the highest levels recorded in recent years for a five-day period. The last notable buildup occurred in June 2023, when an increase of 26,525 BTC was observed, coinciding with BlackRock’s filing for the iShares Bitcoin Trust (IBIT) spot Bitcoin ETF. During that period, Bitcoin prices surged from approximately $25,000 to $30,000.
In October 2023, CME recorded the addition of 25,115 BTC, coinciding with its status as the largest futures exchange, surpassing Binance for the first time. This increase also mirrored a substantial price rise, with Bitcoin climbing from around $25,000 to over $40,000 by year-end.
Analysis of Market Participants
Vetle Lunde, a senior analyst at K33 Research, pointed out that the recent surge in open interest is primarily driven by active and direct market participants, rather than inflows from futures-based ETFs like the ProShares Bitcoin ETF (BITO). “The growth is clearly driven by active/direct market participants—not inflows to futures-based ETFs,” Lunde emphasized.
The accompanying chart from Lunde illustrates the breakdown of open interest by participant cohort on the CME. Active and direct participants currently hold 85,623 BTC, which is comparable to the holdings in March, when Bitcoin reached its all-time high.
ETF Trends and Speculation
Interestingly, the performance of the 1x leveraged ETF has seen a steady decline throughout the year, currently holding just 31,752 BTC. Conversely, the 2x leveraged ETF, which experienced a significant surge in March, has shown only slight growth since then. This trend indicates that speculation and leverage were key drivers in the early part of the year but are no longer the primary factors influencing the current market.
Lunde highlighted that the current trading activity appears to be structured around the upcoming November expiry, which follows the U.S. presidential election. This alignment suggests that market participants are positioning themselves strategically ahead of this significant political event.
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