CME will be the second largest Bitcoin futures exchange as open interest continues to rise.
The Chicago Mercantile Exchange (CME), the regulated derivatives exchange that lists Bitcoin (BTC) futures, now ranks behind Binance in terms of notional open interest for second place on the BTC futures exchange list.
CME open interest reached $3.58 billion on Oct. 30, pushing the regulated exchange to jump two positions from the previous week. CME surpassed Bybit and OKX with $2.6 billion and $1.78 billion in open interest, respectively, and was only a few million shy of Binance's $3.9 billion.
A standard Bitcoin futures contract offered by CME is priced at five BTC, while the micro contract is one-tenth of a Bitcoin. Fixed futures are a major focus of offshore exchanges because they have no expiration date and use a fund rate mechanism to maintain their price relative to the market price, rather than regular futures contracts.
Bitcoin open interest refers to the total number of outstanding Bitcoin futures or options contracts in the market. It measures the amount of money invested in Bitcoin derivatives at any given time. Open interest measures capital flowing in and out of the market. If more capital flows into Bitcoin futures, open interest will increase. But if the capital is withdrawn, the open interest will decrease. Thus, an increase in open desire reflects a mood of aggression, while a decrease in open desire reflects a mood of depression.
RELATED: Blockchain congestion and transaction queues actually prevent ‘pregnant actors': study
Rising CME open interest helped the regulated futures exchange climb to second place among crypto futures exchanges, but cash-settled futures contracts exceeded 100,000 BTC in volume. The increasing interest of traders in the Bitcoin futures market has prompted the CME to acquire 25% of the Bitcoin futures market share.
The bulk of investment in CME futures came in standard futures contracts, indicating a surge in institutional interest that saw a sharp double-digit gain in October, helping it reach a one-year high above $35,000.
Magazine: Deposit Risk: What do crypto exchanges do with your money?
