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’ 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.