CME’s rise to the top suggests increasing institutional interest as the platform is a favorite among large traditional financial institutions.
The Chicago Mercantile Exchange (CME) has surpassed Binance as the exchange with the largest Bitcoin futures open interest (OI) for only the second time in history.
The first time was over two years ago. At the time, strong investor appetite after the launch of ProShares Bitcoin Strategy ETF increased Bitcoin (BTC) Futures trading on the exchange. CME surpassed Binance by about $2 million on open interest before the latter retook its position. Now, CME has flipped that order again according to data from CoinGlass.
Position Flip Suggests Growing Institutional Interest
CME ranked first among futures and perpetual futures exchanges, with an open interest (OI) of roughly $3.98 billion, representing 24.42% of the market share. On the other hand, OI on Binance stood at $3.78 billion and 23.17% of the market.
CME’s rise to the top suggests increasing institutional interest as the platform is a favorite among large traditional financial institutions. This is not surprising, given the excitement over a possible BTC spot ETF approval soon.
“The CME has been gaining market share for almost all of 2023, but these gains intensified over the past few weeks as market excitement around the BTC spot ETF applications soared,” said David Lawant, head of research at trading platform FalconX.
Meanwhile, the spike in OI on CME did not result in growth in the global futures market. According to Tom McClellan, editor at The McClellan Market Report, traders simply moved their trades from other exchanges to CME. Again, while CME leads the BTC standard futures OI chart, Binance maintains its position as the leader in perpetual futures.
Spike in Bitcoin Futures Open Interest May Signal Pending Price Correction
The CFTC’s Commitment of Traders report shows that open interest in standard BTC futures rose by 35% in one month. Research by McClellan Financial reveals that this kind of sudden increase in Bitcoin futures open interest may be a sign of upcoming BTC price movements. Based on historical patterns, a rapid growth in OI within a short period could trigger a price adjustment.
“When that happens, it nearly always marks a turning point for Bitcoin prices. It can be a top or a bottom,” explained Tom McClellan.