The Chicago Mercantile Exchange (CME) is making waves as it rises to become the second-largest Bitcoin futures exchange, with a notional open interest of $3.54 billion, according to Coinglass. This term refers to the US dollar value in active contracts. This jump from fourth place looks like the early momentum of the 2020-21 bull run.
While Binance holds the top spot with $3.83 billion open interest, CME's milestone is seen in its cash-settled futures contracts surpassing the 100,000 BTC mark for the first time. Moreover, CME's share in the BTC futures market hit a lifetime high of 25%.
CME's standard Bitcoin futures contract equals 5 BTC, and its micro contract is one-tenth of 1 BTC. Unlike many offshore exchanges focusing on perpetual futures, CME offers traditional futures contracts which have an expiry date.
Experts see CME's rise as a sign of an institutional-led rally, with Bitcoin soaring 27% this month amid macroeconomic uncertainties and spot ETF excitement. Retail investors have also joined in, pushing the five-day volume of ProShares' Bitcoin futures ETF up by 420% to $340 million last week.
Contrarily, André Dragosch from Deutsche Digital Assets suggests that CME's rise is due to the reduced bearish bets (short trades) on offshore exchanges. He believes the surge doesn't stem from an increase in long futures positions, painting a different picture of the market dynamics.