CME’s Bitcoin Futures Open Interest Set New Record at $7.7B as BTC Surges

Bitcoin Bitcoin halving

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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February 26, 2024

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Bitcoin

futures trading open interest on the Chicago Mercantile Exchange (CME) surged to a record high of $7.7b on Tuesday, reflecting a 15.6% rise within the last 24 hours, CoinGlass data showed.

The surge in open interest corresponds with Bitcoin’s notable price spike. BTC hit a two-year high of about $57,036 on Tuesday — its highest level since late 2021.

Bitcoin futures open interest on CME reflects the total number of active futures contracts yet to be closed. It indicates how interested and involved investors are in trading these contracts. When open interest is high, it suggests more people are actively trading in the market.

The total value of outstanding Bitcoin futures contracts on the CME was $6.8b just a week ago, highlighting the rapid jump in this metric.

Spot Bitcoin ETF Market Sees Over $50B Trading Volume

Action on the CME comes as trading volume in the spot bitcoin ETF market exceeded $50b last week, according to BitMEX Research. This follows ETF approval from the Securities and Exchange Commission for BlackRock, Fidelity, and Bitwise, among others.

These ETFs shattered an all-time daily record for trading volume on Monday, attracting about twice their typical daily average at $2.4b. Notably, BlackRock’s IBIT ETF remained the frontrunner in the market, contributing $1.3 billion to the total volume.

The surge in the CME Bitcoin Futures underscores the general sentiment in the market, fueled by institutional investors’ rapid accumulation of the coin, said Bitrue research.

“The emergence of the spot Bitcoin ETF has changed the narrative, showcasing a massive twist in the adoption of BTC beyond the retail investors that have helped sustain the price for months,” it added. “The convergence of retail and institutional traders might reboot Bitcoin’s open interest and drive a correspondingly sharper price surge in the short- to mid-term.”

Bitcoin Bulls Gear Up for Halving

Traders are now rushing to gain exposure to Bitcoin ahead of the halving event in April, according to 10X Research’s Markus Thielen.

“Everybody is monitoring the ETF inflows and expecting those flows to persist,” he told Cryptonews.

“We are seeing a build-up in futures positions across the CME and crypto native venues, with funding rates spiking above 25% (annualized). Longs are willing to pay these funding rates to shorts, and this is a sign of how bullish traders have become. Historically, Bitcoin has rallied +32% into the halvings from the 60-day time line which we just crossed last week.”

CEO of crypto market-maker Coinrate Sergio S echoed this sentiment. He said managers of large and private funds are advising clients to purchase Bitcoin sooner rather than later, anticipating a jump in price after the halving.

MicroStrategy’s Bitcoin Acquisition Adds Fuel to Price Surge

Aside from anticipation around halving, the price surge may also be attributed to MicroStrategy’s acquisition of 3,000 BTC for $155m.

FxPro senior market analyst Alex Kuptsikevich said a series of stop orders were activated during Tuesday’s Asian session. This occasionally drove Bitcoin’s price up to $57.8K.

“Nevertheless, bitcoin sees no significant barriers to growth to levels just above $60K,” he said. “Bitcoin can quickly go there or around the historical highs at $69K. But the subsequent growth may require a few months of consolidation.”