CME Bitcoin futures contracts rank second in open interest across the market, will institutions take over the cryptocurrency market?

According to data from the analytics platform Skew, the open interest for Bitcoin contracts on the Chicago Mercantile Exchange (CME) has surpassed that of the well-known cryptocurrency exchange Binance, ranking for the first time as the second largest across the market.

CME Bitcoin Futures Open Interest Surpasses Binance

Bitcoin trader Nick Cote commented that institutional investors are taking over cryptocurrencies as expected.

"The institutional takeover of cryptocurrencies is happening as expected. Remember when cryptocurrencies and traditional institutions were at odds? Those days are gone."

https://twitter.com/mBTCPiz/status/1319527434983649280

"Open Interest (OI)" refers to the number of contracts held long or short in a specific market at the end of a trading day. In other words, open interest equals the total long or short positions.

Data from the analytics platform Skew's data shows that OKEx OI is close to $1 billion, followed closely by CME at around $800 million, with Binance ranking third at $720 million. Currently, the overall market's open interest has reached $5 billion, at a relatively high level. CME's open interest is ranked second, making it the most compelling evidence of institutional investors' growing interest in Bitcoin.

Binance Futures Trading Volume Still Ranks First

However, in terms of 24-hour futures trading volume, Binance leads by a significant margin with $4.78 billion, while CME's trading volume is only $420 million.

This situation is largely due to the fact that CME's investors are mostly institutional investors who tend to focus on medium to long-term investments and do not engage in frequent short-term or day trading. Cryptocurrency exchange contracts offer high leverage and are predominantly used by retail investors, thus accumulating more trading volume through a large amount of high-leverage short-term trading.

Continuous Bullish Signals from Traditional Finance

In recent months, Bitcoin's fundamentals have been filled with bullish news from traditional finance. Companies like MicroStrategy and Square announced using cash reserves to purchase Bitcoin, asset management firm Stone Ridge subsequently announced buying ten thousand Bitcoins, PayPal recently stated it will support cryptocurrency buying and selling, and Bitcoin-related financial products like Grayscale and QBTC.U have performed exceptionally well. Furthermore, billionaire hedge fund manager Paul Tudor Jones, who previously sparked discussions in the cryptocurrency field by investing in Bitcoin, also expressed in an interview today: I've never been more bullish on Bitcoin.

This current Bitcoin rally can be attributed to traditional finance, but with macroeconomic uncertainties and the upcoming U.S. election, concerns arise whether this rally, born from traditional finance, will ultimately perish in traditional finance as well?