The Chicago Mercantile Exchange (CME) is now the second-largest bitcoin futures exchange, with only Binance holding a greater market share, according to data from Coinglass.
Bitcoin is rallying this month amid lingering macroeconomic uncertainty and spot ETF optimism. Some market observers think Cme's ascent is a sign of an institutional led rally Lawrence. The CME is of course the Chicago mercantile exchange, a global derivatives marketplace. What are you watching here? OK. It's a little more nuanced than it might seem and it's not just OK, institutions have come in. Therefore, there's this like great boom happening right now in Bitcoin. Yes, prices are up. Yes, CME volume is up. But here's the thing what's also happening. We're seeing relative in relative terms. Yes, the CME is higher. It is getting inching in on B's uh futures business. But the problem is is that Binance has declined in its opening interest uh in general. So what we're seeing is not so much so while the CME uh volume is in the ascendancy, it's still relative to what volumes were last year. Kind of low. And I kind of want to read this tweet which I got Boli highlighted in his piece uh today and it's from Andre Dragos from, from uh from uh Deutsche. So he said uh this does not make sense. CME shares in Bitcoin BT C futures, open interest might have increased relative to other exchanges. But the aggregate amount of Bitcoin futures and perpetual open interest has not increased in Bitcoin terms. Implying that long futures positions were not the main drivers behind the recent surge. To the contrary, short liquidations, short squeeze have led to a significant decline in Bitcoin futures and per open perpetual open interest. So what that means for the layman is you got these guys, they got, they, they basically got short squeezed, open interest declined on some of these exchanges. Prices went up even further when you get a short squeeze. But this is so while you might have had an increase in open interest on the CME, what could have really been the driving factor was this kind of short squeeze that happening on the, on the other exchanges. There, there are a lot of other things happening in the market perhaps even besides the potential of an ETF in uh in the US. And we have to kind of think about macroeconomic situation, people moving money around for, for shady reasons which we, you know, it's still hard to pinpoint here. But that's entirely possible. It's happened before, don't rule it out, it can happen again. So before you go out and back up the Lambeau here, um you know, just chill out everybody. This isn't exactly what you think it is. Lauren hearing your um analysis is always, I don't like Bitcoin bros, I'm serious. I know. I don't because they, they, they, they cause so much hell and havoc for a lot of people. And um you know, and I, you, you kind of see them floating around youtube again, uh telling people, you know, with their laser eyes all of a sudden popping out and you know what, II, I have a lot of foul language to use for them and I'm not going to Lawrence. I was going to say it's always so interesting hearing your analysis, you know, Umar's article did say that some observers think this points to more institutional interests, but it's always important to take a look at the bigger picture. So thank you for that.