CME Open Interest Surges Ahead of BTC Futures ETF Projected Launch

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Oct 20, 2021

Why Crypto Markets Crash Over Weekends []

The value locked in BTC futures contracts on the international derivatives giants Chicago Mercantile Exchange(CME) is skyrocketing. The first notable surge was on OCT. 15, 2021. This rise was after the U.S. SEC said that BTC futures ETFs would freely start trading in the U.S.

Value Locked In CME BTC Futures Contracts Skyrockets

As per recent reports, the number of futures contracts traded but not liquidated was $3.64 B on Friday. That value is more than a twofold rise in a month and also an all-time high. The site has also shown that the number of contracts in CME has risen by over 60% this month alone. This rise comes as the spot price moves from 1% to 16% alongside BTC’S 40 % rally to $62,000.

The activity on CME is increasing amid expectations that several BTC futures ETFs will start trading in the U.S. very soon. Last week, the SEC made a statement clarifying that several of these ETFs would start selling since they are ‘secure.’ However, the top U.S. regulators are uncharacteristically quiet ahead of todays’ approval deadline for the first ETFs.

CME was the fourth-largest exchange last month; however, it holds the second position currently. This improvement comes as the open interest rises worldwide to over $23B for the first time in six months. According to the head of research at the exchange company Bequant Martha Reyes, U.S. institutions contribute to the rise. The interest from these institutions is evident through the increase in CME’s activity and its basis flipping over retail-led exchanges.

Institutional Crypto Interest Increases amid Regulations

On Friday, the SEC said that some BTC futures ETFs would start trading ‘freely’ in the U.S. after today’s approval deadline. This statement comes amid a push for global regulation of digital assets. As a result, the open interest in the U.S. institutions is rising since the move by SEC to allow ETFs is unique due to its fight against cryptos.

As per the head of market insights at Genesis Global Trading Inc., Noelle Acheson, BTC futures ETFs are at a record high. He also noted that this rise would be even higher due to its listing by the U.S. SEC. Acheson also said that the listing would cause lower leverage in the whole market.

He pointed out that the SEC listing would also make institutions invest in regulated contracts rather than real crypto. However, even after the approval of the futures-based ETFs, some observers are still sceptical. Acheson said that such observers claim that the regulation will make the demand for the ETFs fall eventually. Additionally, he said that many investors might continue to access BTC exposure via spot or derivatives.

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