CME Bitcoin futures open interest hits 8-month high

The Chicago Mercantile Exchange CME is seeing an increase in interest in BTC futures. On October 14, open interest (OI) for Bitcoin (BTC) futures trading on the Chicago Mercantile Exchange (CME) increased as BTC recaptured its five-month high of $58,550 on BitStamp. According to data given by ByBt.com, the total amount of outstanding derivatives contracts on the CME Group’s Bitcoin Futures market surpassed $3.22 billion. It is barely $40 million behind the record high set in February 2021. Yet, the OI remained greater than it was at the pinnacle of the Bitcoin price in mid-April. According to the data, this demonstrates institutional investors’ rising interest in digital currency.

The media stated at the end of last week, citing sources, that the first bitcoin-ETF futures would be available on the US market on Monday. As a result of such news, the market reacted favorably, and the top digital currency began to rise in value. On Monday, October 18, the BTC exchange rate surpassed $62,200. The market capitalization of Bitcoin is rapidly approaching $1.2 trillion. The legalization of a futures product based on bitcoin-ETFs should primarily benefit institutional investors. On the Chicago Mercantile Exchange, open interest in bitcoin futures reached a new high.

The previous record, according to ByBt.com, was set in February. According to Martha Reyes, who runs Pequant’s research division, the rise in futures market activity was a direct result of rumors spreading about preparations for a new product launch. Currently, the Chicago exchange (CME) is second only to Binance in terms of the number of contracts deployed in the futures market. The CME now trades Bitcoin futures contracts, which were introduced in December 2017. Along with CME, the Chicago Board of Options Exchange (CBOE) began trading bitcoin futures, although it has stated that it will no longer open new futures contracts on its website.

What are bitcoin futures and CME?

A futures contract is an agreement to acquire or sell an asset at a certain price in the future. Once a contract is signed, the parties must follow through on its conditions regardless of the market price on the futures’ expiration date. Long and short positions are also available with futures contracts, using the leverage effect if needed. Futures, on the other hand, were originally developed as a tool for hedging price risks. Thus, by using this kind of derivatives, you can limit the risks of negative price movements.

As a result, the CME is currently the sole provider of bitcoin futures in the United States. McCourt stated at the end of August that the average daily trading volume of these derivatives had increased to $370 million. Today, the CME trades futures and options contracts in the most developed regions of the United States for crops, energy commodities, stock indices, currency pairings, interest rates, metals, weather, and real estate values, as well as linked options and over-the-counter assets.

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