Binance Surpasses CME in Bitcoin Futures Open Interest as Institutional Demand Declines
Binance has become the largest venue for bitcoin futures open interest (OI), holding about 125,000 BTC, approximately $11.2 billion in notional value, overtaking CME's position. In contrast, CME's Bitcoin futures open interest has declined to around 123,000 BTC, or roughly $11 billion, marking its lowest level since February 2024.
This shift is attributed to steady open interest at Binance while CME's demand waned due to a decrease in the profitability of basis trading strategies. The annualized basis rate, which was around 15% earlier in the year, has compressed to roughly 5% currently. This compression reduces institutional incentives to engage in such trades on CME, as shown by data from Velo.
Earlier in the year, CME's open interest started at 175,000 BTC but has fallen as arbitrage opportunities shrank with the convergence of spot and futures prices. CME had dominated bitcoin futures open interest since November 2023 following institutional positioning ahead of spot BTC ETFs launching in January 2024. However, as these premiums diminished and arbitrage opportunities declined, institutional demand on CME lessened.
Notably, just over a year ago, CME's open interest peaked near 200,000 BTC amid a rally that pushed bitcoin toward $100,000 during a Trump-era market surge. The recent developments highlight a changing landscape in bitcoin futures markets where Binance has taken the lead due to relatively stable open interest and sustained trading activity.
