Demand for CME BTC Futures is skyrocketing

Demand for BTC futures contracts on the CME is skyrocketing. Is the new BTC ETF behind it?

The derivatives exchange CME (Chicago Mercantile Exchange) is quietly stalking the top of the BTC futures market. As from data from bybt.com shows, the volume of open futures contracts is currently 5.4 billion US dollars. This puts the derivatives exchange behind in second place Binance and is preparing to overtake pure crypto exchanges.

Recently, the demand for CME BTC Futures had risen sharply. The reason for this is likely the newly approved futures-based BTC ETFs, which – we reported – have attracted record demand. After all, the demand for the index funds carries over proportionally to the demand for the futures of which they are the underlying.

What is “Open Interest”?

In contrast to stocks or BTC, futures contracts cannot be measured on the basis of the amount in circulation, but rather the volume is measured on the basis of the “open interest”. This means the actual number of futures contracts that are currently being traded on the market. Because, in principle, every futures contract is created out of nothing. All it takes is two parties to agree on the terms of the contract. At its core, a future is nothing more than the promise to trade an asset at a future point in time for a fixed price.

Overall, the open interest in BTC futures paints a clear bullish picture of the future. As can be seen in the graph, the volume traded at the time of going to press was around 25 billion US dollars, which is on par with the March level. The cooling of the open interest in the course of the mini bear market from April to September of this year is also visible.

A high volume of futures contracts during price rallies reflects a generally positive sentiment in the market. This statistic is therefore clearly part of the optimistic mood on the market.

For a long time the futures contracts were open Binance unchallenged in terms of volume at the top. With the introduction of the ProShares BTC ETF, which does not use BTC itself as collateral, but rather the futures contracts of the CME in Chicago, a significant change in the market distribution has been evident since this week. The CME futures are now within striking distance of the Binance Futures in terms of trading volume and should rise to the top if further futures-backed ETFs are approved in the USA,

says analyst Stefan Lübeck.

ProShares: Does the ETF span the spectrum?

The triumph of the CME in terms of BTC futures also shows the growing importance of the traditional financial sector in terms of BTC. Just a few years ago, worlds collided, now they seem to merge more and more. This is impressively demonstrated by the record demand for the ProShares BTC Strategy ETF, the first futures-based BTC ETF in US stock market history. After just two days, investors were trading on the New York Stock Exchange $ BITO worth over one billion US dollars. This has never happened in the history of the New York Stock Exchange.

As Bloomberg Meanwhile, ProShares may soon be unable to meet the gigantic demand for its index fund as the futures contracts underlying the securitization are running out. According to research by the business magazine, individual companies cannot sign more than 2,000 contracts for one month at the same time; BITO currently holds 1,900. Ad-hoc, $ BITO has probably bought additional contracts that will expire in November. However, this could mean that the ETF can no longer properly reproduce the BTC price trend.

It cannot be denied: BTC is shaking up the financial sector these days.