Fun

News Feed - 2023-09-01 03:09:25

Marcel Pechman5 hours agoCME Bitcoin trading volume surpasses Bybit, but is it impacting BTC price?BTC trading volume at CME recently eclipsed Bybit, but what does this mean for Bitcoin"s price?957 Total views38 Total sharesListen to article 0:00Market AnalysisJoin us on social networksThe Chicago Mercantile Exchange (CME) introduced its Bitcoin futures contract in December 2017. This was around the same time that Bitcoin (BTC) had reached an all-time high of $19,800, but by late 2018, the price had dropped to $3,100. Investors in cryptocurrencies quickly learned that CME derivative contracts allowed them to make bullish bets with leverage but also enabled them to bet against the price, a practice known as shorting.


Historically, the Securities and Exchange Commission has rejected Bitcoin exchange-traded fund (ETF) proposals due to concerns about manipulation on unregulated exchanges. The growing significance of CME’s Bitcoin futures market might address this issue, and recently, Hashdex has even requested a Bitcoin ETF that relies on Bitcoin"s physical trades within the CME market.


Professional traders often use BTC derivatives to hedge risks. For instance, one can sell futures contracts while simultaneously buying BTC using borrowed stablecoins using margin. Other examples include selling longer-term BTC futures contracts while purchasing perpetual contracts, which could help a trader benefit from price discrepancies over time.CME overtook Bybit to become the second-largest BTC futures market


CME has played a key role in the Bitcoin futures market since 2020, amassing an impressive $5.45 billion in open interest by October 2021. However, over the following years, the gap widened, as CME"s Bitcoin futures market reached $1.2 billion in January 2023, trailing behind exchanges like Binance, OKX, Bybit and Bitget.


More recently, the Bitcoin price dropped by 12.8% between Aug. 16 and Aug. 17, leading to a $2.4 billion reduction in the aggregate futures open interest. Notably, CME was the only exchange unaffected in terms of open interest. As a result, CME became the second-largest trading platform on Aug. 17, with $2.24 billion in BTC open interest, according to data from CoinGlass.Bitcoin futures open interest ranking. Source: CoinGlass


It’s worth noting that CME exclusively offers monthly contracts, which differ from perpetual or inverse swap contracts, the most traded products on crypto exchanges. Additionally, CME contracts are always cash-settled, while crypto exchanges provide contracts based on both stablecoins and BTC. These distinctions contribute to the difference in open interest between CME and crypto exchanges, but there"s more to the story.CME futures show discrepancies relative to crypto exchanges


Aside from differences in contract settlement and the absence of perpetual contracts, the trading of Bitcoin futures on the CME diverges significantly from most crypto exchanges in terms of both volume and pricing dynamics. The CME records an average daily volume of $1.85 billion, which falls short of its $2.24 billion open interest.


In contrast, Binance’s BTC futures see a daily volume nearing $10 billion, three times greater than its open interest. A comparable pattern is observed at the OKX exchange, where daily trading in BTC futures reaches about $4 billion, surpassing its $1.4 billion open interest. This variance can be attributed partially to CME’s higher margin requirement and the fee-free trading environment for market makers on crypto exchanges. Additionally, CME’s trading hours are constrained, with a halt from 4:00 pm Central Time to 5:00 pm and a full closure on Saturdays.


However, various factors contribute to price distinctions compared to other exchanges. These include shifts in demand for leverage among long and short positions, along with potential disparities in the Bitcoin index price calculation across different providers. Lastly, it’s crucial to consider the solvency risks associated with the tie-up of margin deposits (collateral) until the BTC futures contract settlement.


Related: When will it be too late to invest in Bitcoin?December 2023 BTC futures, CME (blue) vs. Binance (orange) vs. Bybit (cyan). Source: TradingView


Notably, CME Bitcoin futures have traded at approximately $280 higher than those on Binance for the same December 2023 expiration. Ultimately, the day-to-day pricing of BTC futures contracts hinges on several variables. While CME’s trading volumes are trending upward, its pricing mechanism might not flawlessly mirror Bitcoin’s price movements on crypto exchanges.


Given the intricate interplay of variables impacting its pricing and trading dynamics, it fails to provide enhanced price guidance to BTC investors.


This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.# Bitcoin# Cryptocurrencies# Bitcoin Price# ETF# Markets# Cryptocurrency Exchange# Derivatives# CME# Binance# Futures# Market Analysis# OKXAdd reactionAdd reactionRead moreHow to use index funds and ETFs for passive crypto incomeHow AI analysis can change finance and crypto tradingWhen will it be too late to invest in Bitcoin?

News Feed

XRP Slides After Failing To Reclaim $2.9, What’s Next For Bulls?
Este artículo también está disponible en español. XRP’s  upward momentum has taken a hit after the price failed to reclaim its previous high of $2.9, sparking a fr
Technical Analysis: SOL, LUNA and AVAX All Down on Friday
Technical Analysis: SOL, LUNA and AVAX All Down on Friday Solana, terra and avalanche were all lower on Friday, as market uncertainty impacted all major cryptocurrencies. This came
Bitcoin Futures, Options, and Open Interest: Crypto Derivatives Break Records After the Halving 
Bitcoin Futures, Options, and Open Interest: Crypto Derivatives Break Records After the Halving Since the market rout on March 12, otherwise known as ‘Black Thursday,’
Prashant Jha3 hours agoCRV exposure risk throws a curveball at the DeFi ecosystem: Finance RedefinedMost DeFi tokens traded in the red on weekly charts due to the chaos caused by the Curve Finance exploit.1221 Total view
Bitcoin dips below short-term holder realized price, sparking $60K fears
Ciaran Lyons8 hours agoBitcoin dips below short-term holder realized price, sparking $60K fearsBitcoin’s price briefly dipped below a critical level for traders sparking fears that a further correction toward $60,000 m
Shiba Inu Whale Activity Plunges 79% In Three Months — What’s Happening?
Este artículo también está disponible en español. The meme coin market has seen a remarkable transformation in the past year, large-cap tokens like Dogecoin (DOGE) and Sh
Bitcoin Lender Genesis Global Issues $2 Billion in Loans During Record Quarter
Bitcoin Lender Genesis Global Issues $2 Billion in Loans During Record QuarterGenesis Global Trading has reported a 100% jump in new loan originations in the first quarter. The cryp
Dogecoin Price Analysis: Ascending Triangle On 2-Hour Chart Shows DOGE Is Still Very Bullish
Este artículo también está disponible en español. Crypto analyst KrissPaxhas provided a bullish outlook for the Dogecoin price, recently indicating that the foremost meme
Antier Solutions Executes Transactions Worth $100 Million on Blockchain MLM Platforms
Antier Solutions Executes Transactions Worth $100 Million on Blockchain MLM Platforms PRESS RELEASE. After transforming businesses across various industries, blo
Turner Wright6 hours agoSam Bankman-Fried’s legal team moves to pursue theory on FTX terms of serviceLawyers petitioned the court to allow them to question witnesses for the prosecution based on FTX’s terms of servic
Political undertones stand out as Bitcoin 2024 hits Nashville
Gareth Jenkinson4 hours agoPolitical undertones stand out as Bitcoin 2024 hits NashvilleThe Bitcoin 2024 conference is underway in Nashville - with Donald Trump"s address scheduled for July 27 a major drawcard to the eve
IRS Official: Crypto Is Here to Stay and ‘Becoming More Legitimate’
IRS Official: Crypto Is Here to Stay and "Becoming More Legitimate" A top Internal Revenue Service (IRS) official says, “Cryptocurrency is here to stay,” and “it&