CME has overtaken Binance to hold the largest share of Bitcoin futures open interest
Bitcoin (BTC) futures open interest on traditional derivatives market heavyweight Chicago Mercantile Exchange (CME) has been overturned, with Bitcoin surpassing the $37,000 mark in more than 18 months.
Several analysts have highlighted Binance's “overturn” by CME, with the latter passing the largest open interest in Bitcoin futures to the global cryptocurrency exchange.
Wow, the real flip that no one is talking about:
CME has overtaken Binance for the largest share of Bitcoin futures open interest.
Bitter — Soon there will be more costumes here than code clothes.
(h/t @ VidiellaLaura) pic.twitter.com/SIPRLMlFcy
— Will (@WClementeIII) November 9, 2023
Open interest is a commonly used concept in the futures and options markets to measure overall contracts. The metric represents the total number of contracts held by traders at any given time. The difference between the contracts held by buyers (long) and sellers (short) determines the open interest.
Bloomberg Intelligence exchange-traded fund (ETF) research analyst James Seifert followed up on First X's (formerly Twitter) post from Will Clements, who questioned whether CME's growing volume of open interest in Bitcoin futures would ease the U.S. Securities and Exchange Commission's historic concerns about the depth of Bitcoin markets and Potential for market manipulation.
Ok this is interesting… does this now form a ‘mass market'? haha https://t.co/eQb7QXvO3H
— James Seyff (@JSeyff) November 9, 2023
This has long been a point of contention, which has led the SEC to refrain from approving several Bitcoin ETF applications over the past few years. The regulator previously told people at BlackRock and Fidelity that their records were “inadequate” due to missing disclosures about the markets in which Bitcoin ETFs are priced.
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In July 2023, the Chicago Board Options Exchange (CBOE) reintroduced its offering of Bitcoin spot ETFs following comments from the SEC. Fidelity plans to launch its Bitcoin ETF product on the CBOE, while BlackRock, the world's largest asset manager, has grabbed headlines for its proposed Bitcoin ETF listing on the Nasdaq.
CBOE's revised filing with the SEC highlighted its efforts to take additional steps to ensure its ability to detect, investigate and prevent fraud.
“The exchange is expecting to enter into a monitoring sharing agreement with Coinbase, a US-based spot trading platform for Bitcoin operator, which represents US-based and USD-based Bitcoin trading.”
The CBOE filing added that the deal with Coinbase is expected to contain “hallmarks of a monitoring sharing agreement.” This gives CBOE access to more Bitcoin trading data on Coinbase.
The stock exchange also noted that data from Caico Research indicates that Coinbase will represent approximately 50% of the daily trading volume from USD to Bitcoin by May 2023. This is important, given the SEC's displeasure with the depth of BTC markets to support ETF products.
A monitoring sharing agreement is used to ensure that traders and regulators are able to determine whether a market participant is manipulating the price of a stock or shares.
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