CME's Bitcoin Futures Rise Suggests Institutional Investors Are Starting to Swarm Toward Crypto

The Chicago Mercantile Exchange (CME) has become the second-largest derivatives market for bitcoin futures in terms of open interest. The popular exchange has seen an influx of demand since the recent Paypal announcement and the Bitmex debacle as well.

• Data shows that the Bitcoin Mercantile Exchange (Bitmex) open interest for bitcoin futures has taken a dive since it was charged with illegally operating in the United States.
• CME Group’s rise in open interest began on Oct. 10, as Skew.com reported that the exchange added “nearly 1,500 contracts on the October expiry.”
• Since launching in 2017, it’s taken three years for CME Group to catch up with the other bitcoin derivatives markets. CME is now the second-largest bitcoin futures market leader behind Okex in terms of open interest.
• Skew.com’s statistics show that CME Group accounts for close to $800 million worth of bitcoin futures contracts this week.
• The near $800 million represents over 15.9% of the aggregate open interest amongst 12 derivatives exchanges.
• In terms of open interest, exchanges that follow Okex and CME include; Binance, Bitmex, Bybit, Huobi, FTX, Deribit, Bitfinex, Kraken, Bakkt, and Coinflex respectively.
• Bitcoin proponents and luminaries believe CME’s open interest stems from banks and institutions beginning to support cryptocurrencies.
• Chamath Palihapitiya, the CEO of Social Capital said: “After Paypal’s news, every major bank is having a meeting about how to support bitcoin. It’s no longer optional.”
• In terms of aggregate bitcoin futures volumes, CME Group is still behind eight other derivatives exchanges. The top three bitcoin futures trading platforms by volume this week include Binance, Huobi, and Okex.
• The increased open interest toward CME Group’s bitcoin futures derivatives contracts coincides with bitcoin’s (BTC) 14.21% price rise during the last seven days.
• On Saturday, Skew.com tweeted about CME’s Commitment of Traders (COT) report. “Latest CME bitcoin futures COT report – leveraged funds net record short and institutional net record long,” Skew tweeted. “With market rallying, basis trades are increasingly attractive for hedge funds, currently yielding 10%+”