12 Jul 2023

Offshore activity low compared to CME

Perp OI consistent with late May levels, while CME's OI sits 30% higher than June 1 levels.
Derivatives experienced a surge in activity over the past few weeks after the BlackRock announcement. However, we note a clear divide in the enhanced activity levels between institutional market participants and crypto-native participants. The growing activity has been heavily concentrated on CME, with CME facing a 30% growth in notional OI since June 1. Perps, on the other hand, has seen a flat development to its OI since June. CME’s OI peaked ahead of the June expiry and saw a downward trend over the past week but remains elevated compared to May, as we highlight on page 4. Perp OI saw an uptrend throughout May but has since stagnated at around 300k BTC, with a minor uptick immediately following the BlackRock announcement, which later retraced. The stable conditions in perps versus the sustained buoyancy on CME point towards institutions being the moving force of the market after June 15, with offshore participants remaining relatively dormant.
Volumes exhibit a similar trend
We find a similar deviation in activity levels by comparing the 7-day average daily trading volumes on CME and in perps to the average daily trading volume in the same markets throughout May. We see that CME activity levels accelerated substantially after the BlackRock announcement on June 15 and have remained elevated since, with CME’s current 7-day average trading volume sitting 50% higher than the May average. Perps saw accelerated activity in the immediate aftermath of the announcement, mirroring the pattern seen in OI. The activity surge was short-lived, and the current 7-day average daily volume in perps is consistent with the monthly average volume from May.
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