Chicago’s CME Challenging Binance in Bitcoin Futures Dominance

The renowned Chicago Mercantile Exchange (CME) is swiftly advancing in the leaderboard of top bitcoin futures exchanges, based on open interest. This momentum is evocative of the initial phase of the 2020-21 bullish trend.

Currently boasting an open interest (OI) valued at $3.54 billion, CME holds the title of the second-largest bitcoin futures exchange. This marks a significant rise from its fourth-place position just weeks earlier, as reported by Coinglass. To clarify, open interest denotes the total dollar value pinned in ongoing contracts.

Binance, an offshore unregulated exchange, retains its first position, displaying an open interest of $3.83 billion, which is approximately 8% greater than CME’s.

Recent data shows CME’s cash-settled futures contracts surpassing the milestone of 100,000 BTC. Concurrently, its stake in the BTC futures domain soared, achieving an all-time peak of 25%.

For context, a single standard bitcoin futures contract at CME is equal to 5 BTC. Their micro contract equals a tenth of a BTC. Their standard ether futures stand at 50 ETH, and the micro version is one-tenth of 1 ETH. Most of the open interest on offshore platforms is predominantly in perpetual futures, which lack an expiration date and utilize a funding rate to align with the current price.

Several analysts view CME’s rapid growth as indicative of an institutionally-driven momentum. Amidst current macroeconomic ambiguities and hopes tied to spot ETFs, Bitcoin has observed a 27% appreciation this month.

However, the retail sector has also made its presence felt, as showcased by the surge in futures-centric ETFs. Matrixport data reveals that the five-day rolling volume of the industry front-runner, ProShares’ bitcoin futures ETF, witnessed a whopping 420% boost, reaching $340 million in the previous week. Notably, the ProShares ETF is primarily invested in CME bitcoin futures.

Yet, André Dragosch, the research lead at Deutsche Digital Assets, offers a contrasting perspective. Dragosch proposes that the rise of CME is linked more to the decline of pessimistic positions in offshore exchanges. He comments, “While CME’s role in BTC futures OI has expanded in comparison to its peers, the total BTC futures and perps OI hasn’t grown in BTC value. This suggests that the amplification wasn’t majorly fueled by bullish futures positions,” as Dragosch articulated on X.