Binance’s dominance of Bitcoin futures open interest has been overturned by traditional derivatives market heavyweight CME after the currency topped the $37,000 mark for the first time in 18 months.
Many analysts highlighted CME Group’s “disruption” of Binance, which overtook global cryptocurrency exchanges to capture the largest share of Bitcoin futures open interest.
Wow, the real flip no one talks about:
CME just beat out Binance for the largest share of Bitcoin futures open interest.
Bittersweet – there will soon be more suits than hoodies here.
(HT @vidielalaura) pic.twitter.com/SIPRLMlFcy
— Will (@WCClementeIII) November 9, 2023
Open interest is a concept commonly used in futures and options markets to measure the total number of open contracts. This indicator represents the total number of contracts held by a trader at any given point in time. The difference between the number of contracts held by buyers (longs) and the number of contracts held by sellers (shorts) determines open interest.
Bloomberg Intelligence exchange-traded fund (ETF) research analyst James Seyffart followed up on Will Clemente’s original X (formerly Twitter) post, questioning whether the CME’s growing Bitcoin futures open interest count will appease the U.S. The Securities and Exchange Commission (SEC) has a history of raising concerns about the depth of the Bitcoin market and the potential for market manipulation.
Okay, that’s interesting…does this constitute a “larger market” now?Ha ha https://t.co/eQb7QXvO3H
— James Seyff (@JSeyff) November 9, 2023
This has long been a point of contention, leading the SEC to deny approval of multiple spot Bitcoin ETF applications over the past few years.Regulator Tell the person you like before BlackRock and Fidelity said their documents were “inadequate” because they omitted statements related to the markets in which the Bitcoin ETF’s value would be generated.
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In July 2023, the Chicago Board Options Exchange (CBOE) resubmitted its application for a Bitcoin spot ETF based on feedback from the SEC. Fidelity plans to launch its Bitcoin ETF product on CBOE, while BerRock, the world’s largest asset manager, is making headlines for its proposed listing of a Bitcoin ETF on Nasdaq.
CBOE’s revised filing with the SEC highlights its efforts to take additional steps to ensure its ability to detect, investigate and prevent fraud and market manipulation of shares in the proposed Wise Origin Bitcoin Trust Fund.
“The exchange is expected to enter into a surveillance-sharing agreement with Coinbase, the operator of a U.S. Bitcoin spot trading platform that accounts for a significant portion of U.S. dollar-denominated Bitcoin trading.”
The CBOE document added that the agreement with Coinbase is expected to bear “the hallmarks of a surveillance sharing agreement.” This will allow CBOE to supplement access to Bitcoin trading data on Coinbase.
The exchange added that data from Kaiko Research showed that Coinbase accounted for approximately 50% of daily USD/BTC trading volume in May 2023. This is relevant given the SEC’s concerns about the depth of the BTC market supporting ETF products.
Oversight-sharing agreements are designed to ensure exchanges and regulators can detect whether market participants are manipulating stocks or the value of a stock.
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