Binance Surpasses CME in Bitcoin Futures Open Interest
Binance has reclaimed its dominance over CME Group in Bitcoin futures open interest for the first time since late 2023, holding roughly 148,500 BTC ($9.6 billion) compared to CME's 102,840 BTC ($6.7 billion).
The reversal marks a significant shift in the institutional trading landscape, with traditional finance seemingly retreating from crypto derivatives or simply relocating.
Over the past two years, CME's dominance was attributed to its cash and carry basis trade, which allowed hedge funds and proprietary trading desks to harvest yield from the contango. However, as Bitcoin's price declined, the annualized three-month basis on CME fell to 3%, below the 3.8% yield on two-year U.S. Treasuries.
The unwinding of this trade was not a panic exit but arithmetic, as institutional desks found it less profitable than other options. The capital that exited CME migrated to offshore perpetual contracts, with Binance capturing a significant share of the market.