CME Trading Volume Reached Highest in 3 Years After Bitcoin ETF Approval

Derivatives giant Chicago Mercantile Exchange (CME) witnessed a surge in trading volume in January as the U.S. saw spot bitcoin exchange-traded funds (ETFs) win Securities and Exchange Commission (SEC) approval.

The total derivatives trading volume on CME rose 35% in January to $94.9 billion, according to data provided by CCData. This is the highest recorded trading volume for the exchange since October 2021. January saw the much-anticipated approval of spot bitcoin ETFs in the U.S, an important milestone for institutional investors as the products offer them exposure to the world’s largest cryptocurrency by market value.

CME is a Chicago-based firm whose business covers a wide span of financial, commodity and agricultural futures and options. Large institutions use CME to trade bitcoin futures. Futures are a type of derivatives contract that requires buyers to purchase bitcoin at a predetermined price at a later date. They’re essentially a hedge against a future price movement.

The trading volume for bitcoin futures rose 42% to $73 billion in January. “This comes as institutional traders wound down their positions after the approval of the spot bitcoin exchange traded funds (ETF) in the United States,” said a report by CCData.

The exchange also recently saw the volume of bitcoin futures open interest (OI) – the number of existing contracts – surpass Binance (the world’s largest centralized exchange by trading volume). However, CCData notes that this trend has reversed, and open interest has fallen 8.50% to $4.42 billion. Bitcoin options on the exchange also fell, dropping almost 30% to $1.57 billion.

“The rise in the futures volume and the decline in the options volume hints at the

deleveraging and end of speculation for institutional investors who speculated on the spot bitcoin ETF approval catalyst,” said the report.

Ether futures trading volume on CME rose 15.6% in January after attention shifted briefly to a possible ether ETF approval as various applicants are waiting for the SEC to make a decision later this year on whether spot ether ETFs will trade in the U.S.

Ether options traded on CME rose by 27%, the second-highest monthly trading volume for this instrument on the exchange.