- Its open interest peaked at $3.58 billion on Oct. 30
- Bitcoin open interest measures capital inflow and outflow
- Bitcoin’s price underwent a double-digit increase this month
The increase in Chicago Mercantile Exchange (CME) open interest has helped the exchange obtain a Bitcoin futures market share of 25%, Cointelegraph wrote. The CME is now right behind Binance with respect to notional open interest.
Its open interest peaked at $3.58 billion on Oct. 30, propelling the derivatives exchange to rise two positions from the past week. The CME passed OKX and Bybit with $1.78 billion and $2.6 billion in open interest, respectively, and is a close second to Binance’s $3.9 billion.
What are Bitcoin futures?
Bitcoin futures are financial contracts that allow traders to speculate on the future price of Bitcoin without actually owning any. These futures contracts enable individuals and institutions to bet on whether the price of Bitcoin will go up (long position) or down (short position) and potentially profit from their predictions. Bitcoin futures are a derivative product, meaning their value is derived from the value of Bitcoin.
In offshore exchanges, perpetual futures are the main focus of open interest. They do not have an expiration date. The funding rate method applies to correlate their price with the market price.
What is Bitcoin open interest?
Bitcoin open interest measures capital inflow and outflow. It increases if more capital flows to Bitcoin and drops if the capital flows out. Rising open interest reflects a bullish tendency, and dropping open interest reflects a bearish one.
The CME’s increasing open interest did more than help it reach the second spot among futures crypto exchanges. It also helped its futures contracts settled in cash surpass volume of 100,000 BTC.
Surge of institutional interest in futures
Bitcoin’s price underwent a double-digit increase this month, due to which a large portion of investment into CME futures was through standard futures contracts. This reflects a surge of institutional interest, with the flagship crypto passing $35,000 for the first time in a year.
