Institutions Race for Bitcoin, Sending CME Open Interest to Record High

Institutional investors are chomping at the bit to buy bitcoin [BTC] amid renewed optimism of a spot exchange-traded fund (ETF) being approved.

The world's largest cryptocurrency rallied to a 17-month high of $35,000 on Tuesday after the ticker for a BlackRock ETF showed up on the Depository Trust & Clearing Corp. (DTCC) website.

The breakout above the $31,800 resistance level coincided with a drop in open interest, a metric that assesses the notional value of all derivatives positions, across crypto exchanges, according to Coinalyze data. The decline, which reflects retail investor interest, contrasts with open interest on the Chicago Mercantile Exchange (CME), a venue favored by institutions, topping 100,000 bitcoin ($3.4 billion) for the first time.

CME BTC futures OI has breached 100k BTC for the first time ever.

While offshore perp OI shrank by 26,735 BTC yesterday, CME's OI grew by 4,380 BTC. pic.twitter.com/kjKBRYCoSX

— Vetle Lunde (@VetleLunde) October 24, 2023

CME's market share has increased to around 25%, approaching that of Binance's perpetual market, according to Vetle Lunde, a senior analyst at K33Research. CME has also captured an 80% market share for all traditional expiry futures.

Daily trading volume for bitcoin futures on CME hit $1.8 billion in the past 24-hours, with 10,942 contracts worth 5 BTC a piece changing hands during a volatile trading session.

There was also intense buying pressure in Asia, with the Hong Kong CSOP Bitcoin Futures ETF reaching $22.37 million in trading volume on capital inflows of $17.64 million, a record for both volume and inflows. The previous daily turnover was between $125,000 and $250,000.