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Binance Overtakes CME in Bitcoin Futures Dominance
24 Dec
Summary
- Binance now leads CME in Bitcoin futures open interest.
- CME's open interest has declined due to lower basis trade profitability.
- Institutional trading on CME has decreased as opportunities shrink.
Binance has ascended to become the foremost exchange for Bitcoin futures open interest, overtaking the CME. Data indicates Binance now holds approximately 125,000 BTC in open interest, surpassing the CME's 123,000 BTC. This change reflects a significant trend in the cryptocurrency derivatives market.
The CME's open interest has experienced a consistent decline since the start of the year, falling from 175,000 BTC. This downturn is attributed to the diminishing profitability of the basis trade, an arbitrage strategy favored by institutional investors. As this strategy's returns have compressed, institutional participation on the CME has waned.
In contrast, Binance has maintained a steady open interest throughout the year. This stability is likely driven by retail traders who utilize the platform for directional bets on Bitcoin's price. The CME had previously held the top position since November 2023, largely due to institutional positioning ahead of the spot Bitcoin ETF launches.
