Changes in CME Group Bitcoin Futures Open Interest Along with Changes in Bitcoin Price Changes, 2020 ... until 2021 Forbes
A case of rumored buying, selling information seems to be all the rage in Chicago, home to the Chicago Mercantile Exchange Group (CME Group CME ), "the largest regulated futures and options exchange in the world. The rumor in question has been circulating for weeks and postulates that the United States Securities and Exchange Commission (SEC) may agree to approve the creation of ETFsbitcoins if the latter use BTC futures as collateral rather than spot bitcoins.
Which brings us to the sudden surge in money deposited in bitcoin open interest (OI) futures since early September. Think about open interest when investor money is tied to support bets on market activity. CME data shows that as of October 12, there were 10,918 contracts in BTC OI futures, an increase of 72% over a six-week period. While contracts were in the red since mid-February, they are now in the dark compared to the start of the year.
As a recent Forbes report shown, a relatively small number of commercial traders play a key role on the demand side, reflected in OI futures CME rising futures. Although the identity of these inenterprises are protected by both the CME and the CFTC reporting protocol, the way they are labeled in the CFTC Commitments of Traders report suggests that these are non-U.S. financial institution companies with in-depth knowledge Of the industry.
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Changes in the open interest of Bitcoin futuresof the CME group per week and per group of traders, from August 31 to October 5, 2021 Forbes
This surge in CME crypto futures probably isn't an incident. The value of all OI crypto futures reached an all-time high on October 5 at $ 3.3 billion, which means it is already higher than in April, when bitcoin was trading at its all-time high of $ 64,900. In other words, there is very little reason for so much capital to be tied up unless these savvy CME futures investors expect a major positive move before the contract expires. One likely explanation is that they expect Bitcoin ETF approval soon. CME futures are notorious for signaling major changes, and at first glance they may have already started.
The imThe lift of bitcoin futures contracts supporting BTC ETFs cannot be overstated. Viable bitcoin ETF applications relying on BTC futures include those of ProShares, Invesco Ltd. IVZ , VanEck, Valkyrie Digital Assets and Galaxy Digital. If one or any of these are approved, other big asset managers like Fidelity and Vanguard will want to pack their own version of BTC ETFs and BTC mutual funds. Simply put, there would be a race to scale among asset managers to see which of them is taking the lion's share of the massive institutional bitcoin inflows. Likewise, investors will be able to easily gain exposure to bitcoin or crypto from the convenience of their 401k and IRA accounts.without having to open a crypto exchange account. This in turn will allow exchanges like Cboe, Nasdaq NDAQ , and NYSE rake in fees ETF trading. Banks won't want to be left behind and will do what they do best: maintain a large inventory of tradable assets - in this case bitcoin or bitcoin futures - to support trading activities. big clients trading.
But of course, the outcome of this story involves the SEC and its new chairman Gary Gensler, someone who called off speculative retail activity in the forex markets while He was the head of the CFTC and may soon be gone bitcoin ETF fans. Time will tell what will ultimately happen, but the stakes are high and something is going on.really important seems to be preparing.