As per a recent tweet by crypto research and analysis firm Arcane Research, the Chicago Mercantile Exchange (CME) had officially taken the top spot as the largest BTC futures market.
The research examined data from skew analytics showing that open interest (OI) on CME has now hit the $1.16 billion mark. OKEx comes in second with $1.07 billion of open interest BTC futures.
Bitcoin Futures Open Interest Data By Skew Analytics
Just a month ago, the CME OI stood at $750 million, making the exchange the third-largest futures market for Bitcoin behind OKEx and Binance.
However, demand for crypto derivatives on CME has skyrocketed over the past few weeks. Other derivatives exchanges such as Bybit and Huobi have also seen notable open interest spikes over the same period.
The primary factors that have propelled CME’s futures above its competitors are the introduction of crypto support by PayPal, and the legal predicaments surrounding BitMEX derivatives exchange.
The CME futures contract BTCX20 expired on Nov. 27 and is due to be settled today. As soon as the contract expired, the crypto market saw a significant selloff that resulted in BTC dumping as far as $16,216 before correcting higher on Nov. 29.
Institutional Investors Are Entering the Crypto Space
The CME’s open interest on Bitcoin futures has now exceeded $1 billion for the first time since the product launched in Dec. 2017.
Crypto analysts look at futures markets figures as the closest metric for measuring institutional involvement in Bitcoin. Indeed, OI on various futures exchanges gauges the total number of outstanding contracts awaiting settlement, giving analysts an accurate picture of a particular asset’s market popularity.
As CME emerges as the largest consumer Bitcoin futures platform, many crypto enthusiasts will look at the milestone as proof of a strong inflow of institutional investment.
Ripple CEO, Brad Garlinghouse shared his excitement over the long-awaited institutional entry into large scale BTC investments. He added that the mounting institutional frenzy in Bitcoin would benefit the entire crypto ecosystem.
“Never a dull moment in crypto! Institutional investor interest is skyrocketing… industry growth comes down to real-world utility,” he commented.
Will Increasing Interest In BTC Result in Strict Regulation
The rapid surge in the open interest of the CME Bitcoin futures has largely been buoyed by institutional investments that have given the exchange an edge over other retail-focused platforms.
As Bitcoin continues to draw the interest of institutional players in Wall Street, there are concerns that the asset class will likely attract more scrutiny from financial watchdogs.
JPMorgan Chase CEO Jamie Dimon, recently predicted that BTC would catch the attention of regulators as it continues to mature as a mainstream investment vehicle.
Similarly, Coinbase CEO, Brian Armstrong, tweeted of the possibility that U.S Treasury Secretary Steven Mnuchin could introduce new rules for ‘self-custody wallets’ by late January.