19 Apr 2023

ETH open interest up 39% on CME

Massive surge in ETH activity following Shanghai, while BTC activity reigns stale. Are institutions rotating exposure?
Source: CME Group, Skew

In Short

Following Shanghai, we observe a massive surge in ETH activity on CME while CME's BTC futures face stagnation.


  • Ether OI on CME up 39% since April 10
  • BTC OI down 2% in the same period
  • ETH basis starting to reflect staking yields
CME ETH OI up 39% since Shanghai
After Shanghai, the open interest in CME’s ETH contracts exploded, seeing a growth of 39% from April 10 to April 17, as open interest surged from 220,800 ETH to 312,400 ETH. CME’s ETH OI has only been higher on two previous occasions, amidst the FTX collapse in November and during the end of year settlement in 2022.
Source: CME Group
Ethereum’s surging open interest (39%) starkly contrasts the developments in CME’s BTC futures over the past week of -1.5%. This could indicate that CME traders are now rotating into ETH following the upgrade, with the potential implication being that ETH could experience strength vis-a-vis BTC in the period to come. Nonetheless, the ETHBTC recovery from 0.062 ETHBTC to 0.07 ETHBTC coincided with the surging OI. Thus, the recent OI surge may have been one key contributing factor to the strong momentum seen in ETH over the past week.
Futures premium pushes higher amidst OI surge
The futures basis in CME’s Ether futures grew from 1.8% to 4.3% in the days following Shanghai.
Source: Tradingview
The surging open interest may partly be motivated by hedging staked exposure. After stakers gain access to withdrawing funds, potential arbitrages and yield strategies emerge. In a scenario where ETH futures trade at an annualized basis of 1.8% but the staking yield sits at 4%, proprietary funds may be enticed to trade the discrepancies. From here, monitoring if the ETH futures basis will drift toward the expected yields earned from the beacon chain will be very interesting.
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