3 Straight Record Days Drive CME Bitcoin Futures Open Interest to All-Time High

8 May 2020

Open interest for CME bitcoin futures made a new all-time high of just under $500 million on Friday, the third consecutive day of open interest records this week. Significant growth in CME futures demonstrates the intensifying contest between the stalwart institutional trading platform and crypto-native derivatives exchanges like BitMEX. 

Over the past month, CME’s bitcoin futures market has grown faster than nearly every other bitcoin futures market on a percentage and real growth basis.

Real and percentage growth in open interest on bitcoin futures markets
Source: Skew

Soaring CME open interest coincides with news that prominent American hedge funds are interested in investing in bitcoin futures. As of April, Renaissance Technology’s flagship Medallion fund is considering trading bitcoin futures on CME. On Thursday, Paul Tudor Jones II of the Tudor Investment Corp. also told investors he is keen to invest in bitcoin futures. 

“The recent massive growth in regulated futures markets suggests growing institutional interest in bitcoin as an emerging macro hedge against money printing and geopolitical uncertainties,” said Qiao Wang, director of product at Messari and former quantitative trader at Tower Research. 

See also: Most Bitcoin Buyers Are in the Money Ahead of the Halving, Data Suggests

CME competitors in the U.S. have had trouble keeping pace, however. CBOE, for example, finally discontinued its bitcoin futures product in June 2019 after suffering mediocre trading volume for over two years. 

Bakkt, another competitor that launched physically settled bitcoin futures in late 2019 as an alternative to cash-settled CME contracts, claims less than 5% of the U.S. bitcoin futures market. The company has lost two CEOs within six months

For all intents and purposes, the American bitcoin futures market is the CME, and it’s growing faster than almost every other market.

“The recent growth of open interest in our bitcoin futures contract demonstrates market participants are increasingly turning to CME Group to express views and manage their risk amid ongoing global uncertainty,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. “We are committed to continuing to provide our customers with the risk management tools and robust liquidity they need to navigate this challenging environment.”

Bitcoin futures open interest market share in the U.S.
Source: Skew

CME is currently the third-largest bitcoin futures market in the world behind OKEx and BitMEX, according to Skew. And as institutional money continues to show interest, continued growth in CME’s bitcoin futures can be expected.

“It’s unsurprising that CME dominates its competitors in terms of market share. CME is historically the best-in-class futures exchange with top trading infrastructure and market makers,” said Wang.