In the world of cryptocurrency trading, the Chicago Mercantile Exchange (CME) is quickly getting closer to Binance for the top spot in the Bitcoin futures market. CME, which is a regulated market, recently moved up from fourth to second place in terms of open interest. This is similar to what happened in the early stages of the 2020-2021 bull market. The results of this change and why it might be happening are becoming more clear.
According to Coinglass, CME now has $3. 54 billion worth of open interest in Bitcoin futures, bringing it to the second position among Bitcoin futures exchanges. Notional open interest is a number that shows how much trading is happening in the U. S The amount of money in contracts that are currently in use or available. Even though other companies are growing fast, Binance is still in the lead with $3. 83 billion in open interest. They are 8% ahead of CME.
CME is making progress in the Bitcoin trading market.
CME has been doing really well because of its Bitcoin contracts. They have recently exceeded 100,000 BTC for the first time ever. Also, CME now has 25% of the Bitcoin futures market, which shows that they are becoming more important in the cryptocurrency world.
CME has two kinds of contracts for trading Bitcoin in the future: one is regular and the other is smaller called micro. The regular contract is for 5 BTC, and the micro contract is a smaller version equal to 0. Likewise, CME offers futures contracts for Ethereum. The regular contracts represent 50 ETH, and the micro futures represent one-tenth of 1 ETH.
Most interest in offshore exchanges is focused on perpetual futures contracts rather than traditional futures contracts. Perpetuals are contracts for the future that don’t expire, and they use a funding rate to stay in line with the current price.
The quick rise of CME in the Bitcoin futures market has made people wonder what is causing this increase. Some people think that CME’s increase shows that big organizations are causing the cryptocurrency market to go up. Bitcoin’s value went up by 27% this month because people are uncertain about the economy and they think a Bitcoin investment fund will be approved soon.
Regular people who invest in the stock market have also been an important part of this story, as shown by the increase in ETFs based on futures. ProShares’ popular Bitcoin futures ETF had a big increase in trading last week. The amount of trading went up by 420% to reach $340 million. This ETF puts money into CME’s Bitcoin future contracts, making CME even stronger in the market.
However, André Dragosch, who leads the research at Deutsche Digital Assets, has a different view. Dragosch thinks that CME’s rise in value might be because traders are canceling their negative bets on offshore exchanges. He says that even though CME has more Bitcoin futures than other exchanges, the total amount of Bitcoin futures and perpetual open interest hasn’t gone up in Bitcoin terms. This means that people buying futures contracts for a long time may not be the main reason for CME’s recent increase.
As CME becomes more popular in trading Bitcoin futures, we will have to wait and see if it can beat Binance to become the top choice. Cryptocurrency prices can change a lot and are affected by rules and regulations, how people feel about the market, and how much big companies are involved.
Warning: This is not advice for trading.