Bitcoin Futures Open Interest Hits $5.2 Billion on CME
The open interest in Bitcoin (BTC) futures on the Chicago Mercantile Exchange (CME) has reached $5.2 billion, just $200 million short of its all-time high in late October 2021. According to Coinglass data, the open interest in CME’s Bitcoin futures has grown from $3.63 billion to $5.20 billion in the last 30 days, in line with Bitcoin’s 26% gain during the same period, with Bitcoin currently trading at just over $44,000.
From October 1 to 21, 2021, the open interest in CME’s Bitcoin futures surged from $1.46 billion to $5.45 billion. This rapid increase in open interest also coincided with a significant price jump for Bitcoin, which rose from $45,000 to $66,000.
Analyst Tony Sycamore from IG Australia stated that the surge in open interest indicates renewed interest in Bitcoin but does not reveal the positioning of CME traders. According to CME’s report to the Commodities Futures Trading Commission on November 28, the “big players” on the platform were net short at the time, with more short positions than long positions.
Sycamore mentioned that until CME’s latest report is released on December 12, investors won’t have a clear understanding of how the players at CME are positioned. He also added that if the market becomes extremely long, it could be a cause for concern and potential snapback. However, as of now, the market is still short.
The recent rally in Bitcoin’s price is not solely driven by speculation around the potential approval of spot ETF products by the SEC, according to Sycamore. He believes there are other factors at play, including the relationship between crypto and the macro environment, such as the Federal Reserve’s signal to begin cutting interest rates.
In November, CME surpassed Binance to become the top platform for Bitcoin futures open interest, indicating a growing appetite for crypto products among traditional financial institutions. While many analysts anticipate a rapid upward price movement for Bitcoin following a spot ETF approval, some are skeptical about the sustainability of the current rally and predict a “sell the news” event in the days and weeks that follow.