Decline in Bitcoin Futures Open Interest on CME
Glassnode data reveals a significant decline in Bitcoin futures open interest on CME, now around 135,000 BTC. This marks a decrease of approximately 40,000 BTC from its all-time high in March, which coincided with Bitcoin’s price peak. Notably, June 28 saw the largest single-day drop in open interest on the CME, with a reduction of about 14,620 BTC.
Surge in Binance’s Open Interest
In contrast, Binance’s open interest is experiencing a dramatic increase, nearing its previous status as the leading futures exchange, a title it lost in October 2023. According to Glassnode data, CME currently holds just over 30% market dominance, while Binance is just under 30%.
Binance vs CME: Futures Open Interest Dominance
(Source: Glassnode)
Potential Basis Trade Strategy Unwinding
This shift might indicate the unwinding of a basis trade strategy. Typically, this strategy involves holding long positions in spot ETFs and short positions in futures. The closure of futures contracts on CME, without significant inflows into the ETFs, suggests traders might be closing these basis trades.
Current BTC Futures and Spot Prices
The current BTC futures price is $60,400, while the spot price is $60,259, presenting a slight arbitrage opportunity. However, the high funding rate of 10% significantly raises the cost of maintaining a long position in futures, potentially eroding the profitability of the basis trade. Although falling BTC prices below $60,000 do not directly impact the trade, they affect market sentiment and risk, further reducing the attractiveness of this arbitrage strategy.
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