Bitcoin futures open interest on CME nears 2021 all-time high
Futures open interest on the Chicago Mercantile Exchange (CME) has reached $5.2 billion, coming close to its late October 2021 all-time high. Over the past 30 days, open interest in CME’s Bitcoin futures has grown from $3.63 billion to $5.20 billion, coinciding with Bitcoin’s 26% gain during the same period, with the cryptocurrency currently trading at just over $44,000.
CME’s Bitcoin futures open interest experienced a significant surge from $1.46 billion to $5.45 billion between October 1 and October 21, 2021. This surge also aligns with Bitcoin’s substantial price jump from $45,000 to $66,000.
While the increase in open interest indicates a renewed interest in Bitcoin, it does not provide information about the positioning of CME traders. Analyst Tony Sycamore pointed out that CME’s November 28 report to the Commodities Futures Trading Commission revealed that big players on the platform held a net short position at the time, with 20,724 short positions compared to 18,979 long positions. The next report on December 12 will shed light on the current positioning of these players.
Sycamore emphasized the importance of monitoring whether the big players transition from a net short position to a net long position. He expressed concerns about an overextended market if the players were to heavily invest in long positions, potentially leading to a snapback in prices.
The recent surge in Bitcoin’s price is not solely driven by speculation regarding the potential approval of spot ETF products by the Securities and Exchange Commission (SEC). Sycamore believes that other factors, such as the cryptocurrency’s relationship with the macro environment and the Federal Reserve’s decision to start cutting interest rates, are significant drivers of Bitcoin’s price action.
CME’s rise to the top spot in Bitcoin futures open interest, surpassing Binance, indicates growing interest from traditional financial institutions in cryptocurrency products. The approval of a spot ETF is expected to propel Bitcoin’s price even higher, although some analysts remain skeptical about the sustainability of the current rally, predicting a potential sell the news event after the approval.
The article serves to inform readers about the near-record level of Bitcoin futures open interest on CME and the factors contributing to the recent surge in Bitcoin’s price. It offers expert analysis and insights to provide depth and clarity to the story. By adhering to legal and ethical standards, prioritizing reader interests, and involving quotes and interviews where appropriate, the article aims to deliver accurate information to a global audience in an engaging and relatable manner.
