Institutional frenzy: CME becomes 2nd biggest Bitcoin futures market

The CME Bitcoin futures market overtook Binance Futures to become the second-biggest Bitcoin futures exchange by open interest.

On Oct. 10, Skew reported that the CME Bitcoin futures market's open interest rose sharply by 1,500 contracts.

The growing open interest of CME's futures contracts on BTC is likely to have a positive effect on BTC price, particularly as a recent study found that "CME Bitcoin futures contribute more to price discovery than its related spot markets."

A clear spike in institutional demand for Bitcoin in a short period.

For many years, the Bitcoin futures market was dominated by two key players: BitMEX and OKEx.

In the past year, new-generation futures exchanges began to swiftly expand, which led Binance Futures, Bybit, and Huobi to compete against the likes of BitMEX. The CME launched its Bitcoin futures contracts on Dec. 17, 2017.

It is used to gauge the activity of the market by measuring the amount of capital that is deployed onto the futures market.

The rapid increase in the open interest of the CME Bitcoin futures market reflects growing institutional demand for three key reasons.

First, throughout the past three days, the overall volume of the Bitcoin futures market rose substantially.

Second, major institution-focused markets, including the Grayscale Bitcoin Trust, reported a massive upsurge in institutional inflows.