The Chicago Mercantile Exchange’s (CME) bitcoin (BTC) futures market is busier than ever.
On Friday, a record 28,899 standard futures contracts were open or active on the CME. That amounts to a notional open interest of $10.3 billion at bitcoin’s going market rate of around $71,500. The standard contract, sized at 5 BTC, is widely considered a proxy for institutional activity.
Meanwhile, open interest in micro futures, sized at one-tenth of 1 BTC, stood at 38,283, which equates to $273 million in notional terms.
The combined open interest of over $10 billion is twice as large as the peak of $5.2 billion registered during the 2021 bull market and bigger than the market capitalization of several top 25 cryptocurrencies like litecoin, bitcoin cash, and others.
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Bitcoin: open interest in CME’s standard futures contracts. (CME) (CME)
An uptick in open interest alongside a price rise is said to confirm the uptrend. Bitcoin has rallied 70% this year and the bullish mood is also evident from the 15% annualized premium in futures relative to spot prices.
CME’s regulated and cash-settled futures have long been a preferred venue for institutions and other market participants looking to gain exposure to cryptocurrency without owning it. Besides, authorized participants tied to U.S.-listed spot exchange-traded funds (ETFs) likely trade CME futures or CME futures-based ETFs to hedge their risks.
The CFTC-regulated exchange steadily climbed ranks last year to become the world’s largest futures exchange in a pattern reminiscent of the 2020-21 bull run.