Second quarter records have been shattered by the derivative powerhouse, the Chicago Mercantile Exchange’s (CME) regulated bitcoin and ether futures as major players flock to the platform. Surprisingly, the average number of large open interest holders amped up to 107 – a notable peak in the annals of these crypto futures. This trend was echoed in Ether, where its large open interest holders averaged 62 through the same quarter.
These aren’t just mere digits, but an affirmation of the persistent rise of the institutional interest in bitcoin futures throughout the quarter. Navigating through the rising market instability and managing risks and exposure have been simplified by the availability of regulated avenues and products. The Commodity Futures Trading Commission closely regulates these futuristic classes, instilling a sense of security among the traders.
Despite being a preferred option for institutions to gain exposure to the cryptocurrency landscape, the CME futures are cash-settled, hence freeing the institutions from the need to own crypto outright. While this has resulted in record participation from major incumbents, top cryptocurrencies pressed on their first-quarter rally. Notably, Bitcoin rose by 7% in three months to June, marking an 84% upsurge in the first half of the year, while Ether gained a whopping 61%.
The consistent climb in trading volumes and open interest in BTC and ETH futures and options in 2022 denotes the enhanced appetite for hedging tools in these promising markets. However, as the number of contracts transacted on any given day witnesses an upswing, the open interest or active contracts at any given time signals the infiltration of fresh capital into the marketplace.
The story of this digital upheaval is eloquently woven into the surge in trading volumes and open interest in futures and options linked to Bitcoin and Ether. The standard bitcoin futures contracts’ open interest averaged an astonishing 14,800 contracts through the first half, marking a 15% rise from 2022.
And with optimising the ether-bitcoin ratio on its agenda, the CME is set to entice investors by listing futures in line with it, regulatory approval pending. Plus, they have already broadened their options product suite by listing weekly Bitcoin and Ether expiries, making an even compelling case for crypto investors.
While the numbers and the records are impressive, the larger question remains: will the CME continue to enjoy this pivotal role in regulated futures, or will we see ever-escalating competition in this space? Only time will tell, but right now, the future looks brighter than ever for crypto enthusiasts and CME alike.
Source: Coindesk
