CME Bitcoin Open Interest Surges to Record $5.4B Following ETF Launches

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In Brief
  • Bitcoin OI surges by $4 billion in October.

  • ProShares wants CME share limits lifted.

  • VanEck bitcoin ETF to debut on Oct 26.

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Since the trading began on two highly-anticipated Bitcoin futures exchange-traded funds last week, open interest (OI) on the Chicago Mercantile Exchange has surged to record highs.

According to analytics provider Glassnode, open interest on the CME has skyrocketed to an all-time high of $5.44 billion. Open interest, or OI, is a measurement of the total number of outstanding derivative contracts, futures in this case, that have not been settled.

Glassnode added that OI has increased by almost $4 billion in October, a growth of 265% since the end of September, which has been “in part driven by the introduction of the $BITO ETF product.”

Skew analytics is reporting a slightly higher figure of $5.6 billion for CME which governs the contracts for the two newly launched Bitcoin ETFs. Binance is a close second with an OI of $5.4 billion.

Rising OI is generally considered bullish as there are more market participants and more money exposed to the underlying asset.

On Oct. 18, BeInCrypto reported that leverage was also increasing along with OI and there have been several market crashes caused by the liquidation of highly leveraged positions.  

ProShares wants bitcoin ETF limits lifted

Bloomberg senior ETF analyst Eric Balchunas has reported that ProShares has made a filing for exemption from CME position limits.

The fund has been wildly popular, topping $1 billion in volume on its first day of trading and becoming the first-ever ETF to hit $1 billion in assets under management in just two days. BITO broke the previous record held by a gold-based fund with the ticker GLD which hit the billion-dollar mark in three days in 2004.

On Oct 23, Balchunas noted:

“ProShares is filing to be exempt from CME position limits AND they can use swaps if need-be. Both would obv be huge help to maintain exposure if $BITO keeps getting bigger.”

Last week, BeInCrypto reported that the ProShares fund was approaching the limits for front-month contracts. It had held almost 1,900 contracts at one period last week and the CME limit is 2,000. As of the close of trade on Oct 22, ProShares held 1,679 CME BTC futures contracts.

VanEck on Tuesday

The third Bitcoin futures ETF from VanEck is expected to begin trading on Oct 26, adding another option for institutional investors. VanEck secured approval from the SEC last week and is poised to launch its Bitcoin Strategy ETF under the ticker XBTF.

Bitcoin itself was trading up 3% on the day at $62,820 at the time of press according to CoinGecko.

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Martin has been covering the latest developments on cyber security and infotech for two decades. He has previous trading experience and has been actively covering the blockchain and crypto industry since 2017.

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