28 Jun 2023

CME OI nearing all-time highs

The BlackRock announcement, in combination with the launch of EDX Markets and multiple ETF re-filings, contributed to revitalizing institutional activity in BTC over the past week.
CME BTC IO June 27
CME’s BTC-denominated OI surged by 39.8%, the third-largest weekly growth since October 2019. As of the Friday close, the OI in CME’s BTC futures sat at 93,750 BTC, nearing all-time highs from November 2022.
CME BTC OI June 27 in text
CME has only experienced similar weekly growth twice since October 2019, with both surges being caused by underlying structural regimes differing from the current. October 16 to October 22, 2021, saw a 42.96% surge in OI, caused by the launch of BITO. This alone contributing to elevating the OI by 19,000 BTC due to massive inflows during the BITO launch week. November 5 to November 11, 2022, saw the largest weekly OI growth on CME’s BTC futures due to excess hedging following the collapse of FTX. The past week’s surge more closely resembles the surging OI in October 2020, when institutional BTC allocations dominated the news flow, as one headline after another reduced the perceived reputational risk of trading BTC.

ETF flows: Short outflow, long inflow

ProShares ETFs BTC Exposure June 27
ProShares’ substantial exposure in BTC futures tends to represent 35-50% of all the open interest in BTC futures, and the flows in the short and long ETFs directly impact long and short demand in these futures and, thus, premiums. Over the past week, BITI, ProShares short BTC instrument, saw its exposure fall to August lows of 2,575 BTC, while BITO has seen solid and steady inflows alongside BTC’s stellar performance.
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