CME overtakes Binance to grab largest share of Bitcoin futures open interest

Open interest is an idea frequently utilized in options and futures markets to determine the overall number of impressive agreements. The distinction in between the number of contracts that are held by buyers (longs) and the number of contracts held by sellers (shorts) figures out open interest.Bitcoin futures volume and open interest on CME over the previous month. Source: CMEBloomberg Intelligence exchange-traded fund (ETF) research analyst James Seyffart followed up an initial X (previously Twitter) post from Will Clemente, questioning whether CMEs growing amount of Bitcoin futures open interest would calm the United States Securities and Exchange Commissions (SEC) historic concerns over the depth of Bitcoin markets and the capacity for market manipulation.

Binances dominance of Bitcoin futures open interest has been toppled by traditional derivatives market location heavyweight Chicago Mercantile Exchange (CME), following Bitcoins first move past the $37,000 mark in over 18 months.A number of analysts highlighted the flippening of Binance by CME, with the latter surpassing the international cryptocurrency exchange for the largest share of Bitcoin futures open interest.Wow, the genuine flippening that no one is discussing: CME just flipped Binance for the biggest share of Bitcoin futures open interest.Bittersweet– there will soon be more matches than hoodies here. (h/t @VidiellaLaura) pic.twitter.com/SIPRLMlFcy— Will (@WClementeIII) November 9, 2023

This has actually long been a point of contention, which has actually led to the SEC holding back from authorizing a number of spot Bitcoin ETF applications over the past few years. The regulator previously informed the similarity BlackRock and Fidelity that their filings were “insufficient” due to the omission of statements connecting to the marketplaces in which the Bitcoin ETFs will derive their value.Related: Bitcoin puzzles traders as BTC cost targets $40K regardless of decreasing volumeIn July 2023, the Chicago Board Options Exchange (CBOE) refiled a submission for Bitcoin area ETFs following feedback from the SEC. Fidelity means to release its Bitcoin ETF product on CBOE, while BlackRock, the worlds largest asset supervisor, got headings for its proposed Bitcoin ETF, which is set to be used on the Nasdaq.CBOEs changed filing with the SEC highlighted its efforts to take additional steps to guarantee its ability to detect, examine and deter scams and market manipulation of shares in the proposed Wise Origin Bitcoin Trust. “The Exchange is anticipating to get in into a surveillance-sharing agreement with Coinbase, an operator of a United States-based area trading platform for Bitcoin that represents a significant portion of USD and us-based denominated Bitcoin trading.” CBOEs filing includes that the arrangement with Coinbase is expected to bring the trademarks of a surveillance-sharing contract. This will offer CBOE additional access to Bitcoin trading data on Coinbase.The stock exchange also added that Kaiko Research data suggested that Coinbase represented roughly 50% of the U.S. dollar to Bitcoin daily trading volume in May 2023. This is important offered the SECs misgivings over the depth of BTC markets to back ETF products.A surveillance-sharing contract is meant to make sure that exchanges and regulators have the ability to discover whether a market actor is controling the value of stocks or shares.Magazine: United States gov t ruined my $250K Bitcoin cost prediction: Tim Draper, Hall of Flame

Other Questions People Ask

What does it mean that CME overtakes Binance to grab the largest share of Bitcoin futures open interest?

The CME's overtaking of Binance signifies a significant shift in the Bitcoin futures market, indicating that traditional financial institutions are gaining more influence. This change could enhance the legitimacy of Bitcoin futures, potentially addressing regulatory concerns from the SEC regarding market manipulation. As CME captures a larger share of open interest, it may lead to increased institutional participation and confidence in Bitcoin as an asset class.

How does CME's increase in Bitcoin futures open interest affect market perception?

CME's rise in Bitcoin futures open interest can positively influence market perception by showcasing the growing acceptance of Bitcoin in traditional finance. This shift may alleviate some of the SEC's concerns about market depth and manipulation, which have previously hindered the approval of Bitcoin ETFs. As institutional players like CME dominate the market, it could foster a more stable trading environment for Bitcoin futures.

What implications does CME overtaking Binance have for Bitcoin ETF applications?

The CME's dominance in Bitcoin futures open interest could have significant implications for pending Bitcoin ETF applications. With increased confidence in the market's integrity, the SEC may be more inclined to approve these applications, as they have previously cited concerns over market manipulation. The collaboration between CBOE and Coinbase for surveillance-sharing agreements further supports this potential shift in regulatory stance.

Why is the flippening of CME and Binance important for Bitcoin traders?

The flippening of CME overtaking Binance is crucial for Bitcoin traders as it reflects a maturation of the market, potentially leading to increased liquidity and stability. Traders may benefit from a more regulated environment, which could reduce risks associated with price manipulation. Additionally, this shift might attract more institutional investors, further enhancing trading opportunities and market depth.

What factors contributed to CME overtaking Binance in Bitcoin futures open interest?

Several factors contributed to CME overtaking Binance, including the recent surge in Bitcoin prices past $37,000, which likely attracted more institutional interest. Analysts have noted that CME's reputation as a traditional derivatives market heavyweight plays a role in its growing dominance. Furthermore, the SEC's ongoing scrutiny of cryptocurrency exchanges like Binance may have prompted traders to seek safer alternatives like CME for their futures contracts.