CME Emerges Via Binance to Establish Dominance in the Trading of Bitcoin Futures


Changpeng Zhao, CEO of Binance, has taken notice of the Chicago Mercantile Exchange’s (CME) meteoric ascent in the field of bitcoin futures trading.

When it comes to Bitcoin futures trading, the Chicago Mercantile Exchange has now overtaken Binance. Finally, after many months of waiting, we learned that CME’s bitcoin futures trading volume exceeds that of Binance, the biggest cryptocurrency exchange in the world.

This indicates growing institutional interest in cryptocurrency, however it does not happen very frequently. Coincidentally (but believe me, this is unrelated), CME is seen as the Exchange for the Mature Investor and is sponsoring this week’s issue of The Node newsletter.

However, when it comes to cryptocurrency-only exchanges like Binance, the idea of wearing a tie to trade Bitcoin perpetual contracts seems to be unusual.

Binance’s CEO, Changpeng Zhao, has recognized the CME’s rise to prominence as the premier Bitcoin futures trading platform.

In reaction to findings from Coinglass indicating that CME has gained the top position for the first time in two years, Zhao views this development as an important indicator of U.S. institutions progressively joining the crypto realm. He wonders how other nations will react to this dramatic change.

Open Interest (OI) for CME reached $4.07 billion, an increase of 4% in only 24 hours, according to statistics compiled by Coinglass. Because of this, CME now has a 24.7% share of the market. Binance, however, fell to second place, with an OI of $3.8 billion, a decline of 7.8 percent.

CME stands apart for catering to conventional institutions, leading to the idea that its ascension implies a spike of institutional investors into the Bitcoin market. Traditional futures contracts with set expiry dates are the platform’s forte.

Unlike Binance and other exchanges, which provide both standard futures and perpetual contracts (futures without a fixed expiration date), this one only offers the latter.

Bitcoin’s price has increased by over 100 percent this year, which may be a contributing factor to the currency’s rising popularity. Some institutions may be enticed to join the fray if they see an opportunity.

The impending Bitcoin halving in the next year and the likely launching of a spot Bitcoin exchange-traded fund (ETF) before the year’s end are other possible contributors. Bets are being placed that these occurrences will stimulate more purchasing.

Buyers get into futures contracts when they commit to acquire Bitcoin at a certain price at a later date. It may be thought of as insurance against the possibility of a drop in value and is often used in the hope that the asset’s price will rise in the future.

A lot of people think Bitcoin has plenty of untapped potential. Some people, like Matt Hougan, Chief Investment Officer at Bitwise, say that the market doesn’t fully take into account how excited people are about a Bitcoin ETF. According to the law of supply and demand, the imminent halving of the Bitcoin mining reward may also have a beneficial effect on the price of Bitcoin.

Also Read: Coinbase Introduces On-Chain Know Your Customer for Its Over 100 Million Users

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