Open interest in Bitcoin futures on CME falls to six-month low

Open interest in Bitcoin futures on the Chicago Mercantile Exchange (CME) fell to its six-month low, at $1.36 billion. Data from Skew show.

Since mid-April, the figure has more than halved. The number of open positions also fell by 22%, to 36,265 contracts.

“CME was the preferred platform among institutional players for hedging positions in Grayscale’s Bitcoin Trust (GBTC). Since the premium in the instrument disappeared, the incentive for such investments has fallen,”— CoinDesk explained at Amber Group.

Accredited investors open GBTC positions at net asset value (NAV). After that, their funds remain locked for six months.

Until February, GBTC shares traded at a premium of up to 40%, creating arbitrage opportunities. Large players hedged GBTC positions with CME futures. Through such actions they could capture the premium and avoid losses from price swings in Bitcoin.

Such operations lost their sense in began trading at a discount in February. As of writing, GBTC’s secondary market price remains below NAV.

May market crash was another factor weighing on open interest. It led to the unwinding of excessive leverage on CME and other exchanges. As a result, the aggregate figure across all crypto-derivative platforms fell from $19 billion to $11.9 billion.

On May 19, at one point the volume of long liquidations in cryptocurrency futures surpassed $7.1 billion.

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