CME Open Interest for Bitcoin Futures Up 100% Since Start of 2020

Open interest in bitcoin futures listed on the Chicago Mercantile Exchange (CME) have doubled in the first few days of the year, as noted by data analytics firm Skew.

About $235 million worth of positions (5,329 contracts) were open on the CME on Jan. 17 compared to $110 million seen in early December. Open interest is the sum of all contracts that have not expired, been exercised or physically delivered.

Open interest has spiked alongside price, confirming an upward trend. Bitcoin bottomed out near $6,430 in mid-December and rose to a 2.5-month high of $9,188 on Sunday. At press time, the cryptocurrency changed hands at $8,600, representing a 20 percent gain on a year-to-date basis. 

Increased activity ahead of options launch

The bitcoin futures market witnessed increased activity in the runup to the launch of options trading. Open interest rose to more than 5,000 contracts in the first four trading days of the week. 

Further, more than 17,000 contracts (equivalent to over 85,000 bitcoin) traded on Jan. 8 – the day when the options product went live and registered a first-day volume of $2.3 million or 55 options contracts. 

Options trading volume more than doubled to 122 contracts on Friday,  amounting to a notional volume of 610 BTC or $5.3 million, as each contract represents five bitcoins. 

Institutional Participation

“BTC has seen remarkable growth in volume and customer interest with nearly 2.5M contracts traded to date and 4.9K+ contracts traded daily, “ the CME tweeted on Dec. 17.

Further, nearly 6,400 futures contracts traded each day (equal to 31,850 bitcoin) at the exchange in 2019.

The ever increasing numbers at the CME may reflect rising institutional interest in the cryptocurrency, and could accelerate bitcoin’s evolution as a mature asset class. 

“CME’s product has evolved over the last two years and is now one of the most liquid, listed bitcoin derivatives globally. We have seen strong participation from institutional investors, physical bitcoin traders and other clients who value the transparency, price discovery and risk transfer that only a regulated marketplace like CME Group can offer,” Tim McCour, managing director at CME Group wrote in a LinkedIn post in December. 

Other exchanges also witnessed increased activity over the last few months. Total trading volume rose in futures listed across the globe to well above $25 billion on Jan. 14, according to Skew. That was the busiest day since Oct. 26.