Bitcoin ETF Excitement Drives Wall Street Giant CME Above Binance in BTC Futures Rankings

CME's rise to the top rank highlights the growing institutional demand for bitcoin, as the venue is almost exclusively used by large traditional financial institutions, one analyst noted.

AccessTimeIconNov 10, 2023 at 5:26 a.m. UTC
Updated Nov 10, 2023 at 3:14 p.m. UTC

CME Group just took the top spot on the list of world's biggest bitcoin (BTC) futures exchanges, replacing Binance for the first time in two years.

Open interest – derivatives industry jargon for the number of existing contracts – on Thursday hit $4.07 billion worth of positions at CME, representing a 24.7% share of the entire bitcoin futures market, CoinGlass data shows. Binance was at $3.8 billion.

CME is a stalwart of traditional finance, a Chicago-based firm whose business covers a wide span of financial, commodity and agricultural futures and options. The timing of it overtaking Binance, a crypto-focused exchange, is poignant. Wall Street firms like BlackRock are increasingly steering the narrative around bitcoin and the rest of crypto, by trying, for instance, to introduce bitcoin and ether (ETH) ETFs in an attempt to open up crypto investing to a broader group of people. Such financial heavyweights are accustomed to doing business on a highly regulated exchange like CME, as opposed to Binance, which has run into trouble with U.S. regulators.

"As market participants seek regulated venues and highly liquid products to hedge market volatility and manage price exposure, we continue to see increased institutional interest across our crypto suite," said Tim McCourt, global head of financial and OTC products at CME Group. "Market participants view CME Group as a valued source for risk management."

The change in rankings occurred as the crypto market endured a major leverage flush-out amid wild price swings on Thursday. The aggregate bitcoin open interest dropped by $2 billion from $12 billion. The decline impacted Binance traders disproportionately more than CME market participants.

Cumulative market share gains and losses by exchanges in 2023 (FalconX)
Cumulative market share gains and losses by exchanges in 2023 (FalconX)

Bitcoin first surged to an 18-month high of almost $38,000 on Thursday, then sharply retraced toward $36,000 after a filing showed a corporate entity named "iShares Ethereum Trust" had been registered in the state of Delaware. A similar move happened before BlackRock – the owner of iShares – filed for a spot BTC exchange-traded fund (ETF) in June.

CME's rise to the top happened gradually this year and is a significant development as it highlights the growing demand from institutional market participants to trade the largest and oldest crypto asset. A paper published by Bitwise Asset Management in 2020 said that the CME bitcoin futures market leads the spot market in a consistent and statistically significant manner.

"The CME has been gaining market share for almost all of 2023, but these gains intensified over the past few weeks as market excitement around the BTC spot ETF applications soared," David Lawant, head of research at trading platform FalconX, told CoinDesk in a note.

"Given the CME is a venue used almost exclusively by large traditional financial institutions, it shows how much interest there has been from this audience in crypto," Lawant added.

Binance didn't respond to a request for comment, though CEO Changpeng Zhao posted a screenshot of this article on X (formerly Twitter) and wrote: "U.S. institutions are moving into crypto. What about your country?"

UPDATE (Nov. 10, 2023, 14:57 UTC): Adds a quote from CME and Binance CEO Changpeng Zhao.

Edited by Omkar Godbole and Nick Baker.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.