The total derivatives trading volume on CME rose 35% in January to $94.9 billion, the highest since October 2021.
Spot Bitcoin ETF Approval Will Trigger ‘Selling Pressure’ on CME Futures Market: K33
Bitcoin futures’ open interest on the Chicago Mercantile Exchange surged to an all-time high Tuesday as institutions piled into the asset, speculating on a spot bitcoin ETF approval.
Bitcoin Price Soars Above $45,500: Top 3 Reasons
The Bitcoin price has risen to over $45,900 in the last few hours, an increase of 7.5% in the last 24 hours. These are the three main reasons:
#1 Massive Bid From CME
The recent surge in Bitcoin’s price was predominantly led by activities on the Chicago Mercantile Exchange (CME). At a point, the Bitcoin price on CME was approximately $1,400 higher than on Coinbase, indicating significant buying pressure on this platform.
The CME Group, a renowned exchange for cash settled Bitcoin futures contracts, attracts a substantial institutional investor base, making its price movements particularly noteworthy. Analyst Will Clemente highlighted the unusual trading activity, stating via X, “CME trading at fresh 52-week highs on an illiquid Monday night like someone knows something.”
Supporting this observation, analyst @MacnBTC remarked, “Something obviously leaking as CME is up +8.5% on the day.” Bluntz Capital echoed similar sentiments, noting, “CME tradfi apes are aping, huge premium.”
CME tradfi apes are aping, huge premium pic.twitter.com/dwfW0shLB7
— Bluntz (@Bluntz_Capital) January 2, 2024
#2 Spot Bitcoin ETF Approval Rumors
The approach of the January 10 deadline for the United States Securities and Exchange Commission’s (SEC) decision on the approval of a spot Bitcoin exchange-traded fund (ETF) has stirred significant market anticipation. As Bitcoinist reported today, the SEC is reportedly doing the last paperwork.
Moreover, rumors intensified yesterday that the SEC could approve a batch of spot Bitcoin ETF already today, on January 2. A report from Reuters indicated that the SEC could potentially inform issuers as soon as today, Tuesday or Wednesday, about their authorization to introduce spot Bitcoin ETFs in the subsequent week. This speculation may have sparked a sense of FOMO (Fear of Missing Out) among investors.
However, this is by no means a done deal. Eleanor Terrett of FOX Business shared insights on X, commenting on the SEC’s unpredictability. Terrett pointed out, “While the SEC is surely unpredictable, it would surprise me if approvals were to happen [today]. […] The SEC still has to review all the changes made to the S-1s filed on Thursday/Friday AND make comments on them.”
#3 Strong Technicals On Multiple Time Frames
On the technical front, Bitcoin displayed strong bullish signals across various time frames. Renowned crypto analyst Skew focused on the 30-minute chart of BTC/USDT. In a post on X , Skew shared an attached chart and analyzed:
BTC 30min: Systematically this has been super clean. Price tested both 4H 200MA & 200EMA then grinded with 4H 200MA before reclaiming 1H 200MA & 200EMA (momentum ignition). Technical flip of previous resistance into running towards the highs. Now we see how much momentum is brewing behind this.
On the daily chart, BTC bounced off the lower end of the ascending trend channel and is now trying to overcome the upper resistance. Once again, BTC has respected the trend which started in mid-October and is now starting another breakout attempt. A daily close above $45,500 could be decisive. Then, the 0.618 Fibonacci retracement level at $48,700 could be the next target. At press time, BTC stood at $45,693.
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CME Overtakes Binance In Bitcoin Futures: A New Era For Institutional Crypto Investments?
The Chicago Mercantile Exchange (CME) has recently clinched the title of the largest Bitcoin futures exchange by open interest, overtaking the renowned crypto exchange, Binance.
Data from Coinglass reveals that CME’s open positions have reached roughly $4.04 billion across 108,900 Bitcoin contracts, accounting for 24.22% of the entire Bitcoin futures market.
Open interest in the context of futures trading refers to the total number of outstanding derivative contracts, such as futures, that have not yet been settled. This metric is crucial as it indicates the market’s liquidity level and trading activity.
For BTC futures, it represents the total value of all positions yet to be closed, offering insights into market sentiment and investor behavior. The rise of CME to the top position signifies a notable shift in the market dynamics, indicating a growing preference among institutional investors for regulated derivatives products.
Institutional Appetite For BTC And Implications For SEC Spot ETF Approvals
Binance, once the leader in BTC futures open interest, now trails CME with $3.90 billion in open interest, comprising 23.37% of the total market. This change underscores a significant trend: institutional investors increasingly favor Bitcoin as an investment vehicle, as evidenced by entities like MicroStrategy.
This enterprise software company, known for its substantial Bitcoin holdings, recently acquired an additional 155 BTC for $5.3 million. With Bitcoin’s current trading price above $37,000, MicroStrategy’s investment boasts roughly $1.1 billion in paper profits, underscoring the asset’s appeal to corporate investors.
In October, @MicroStrategy acquired an additional 155 BTC for $5.3 million and now holds 158,400 BTC. Please join us at 5pm ET as we discuss our Q3 2023 financial results and answer questions about the outlook for #BusinessIntelligence and #Bitcoin. $MSTR https://t.co/w7eRUcGobi
— Michael Saylor (@saylor) November 1, 2023
The overtaking of Binance by CME in Bitcoin futures open interest has captured market participants’ attention and raised crucial questions among regulatory observers.
Notably, Bloomberg Intelligence ETF research analyst James Seyffart, echoing sentiments from Will Clemente, has speculated on whether CME’s growing Bitcoin futures open interest might address the US Securities and Exchange Commission’s (SEC) concerns about market depth and potential manipulation in Bitcoin markets.
Okay this is interesting… Does this constitute ‘market of significant size’ now? haha https://t.co/eQb7QXvO3H
— James Seyffart (@JSeyff) November 9, 2023
This shift in market leadership from a crypto exchange like Binance to a traditional and regulated derivatives marketplace like CME could signal a maturing BTC market. Such a development might influence the SEC’s stance on approving spot Bitcoin ETFs.
Bitcoin Latest Price Action
While CME is overthrowing Binance regarding Bitcoin’s open interest, the crypto asset has recently reclaimed its $37,000 zone in the past hours after retracing slightly below that price mark following the quick spike on Thursday.
Notably, BTC currently trades for $37,350 at the time of writing, up by 2.1% in the past 24 hours and nearly 10% over the past 7 days.
Featured image from Unsplash, Chart from TradingView
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