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CME Bitcoin Futures Open Interest Hits New Record High of $841 Million

Institutional interest in Bitcoin (BTC) continues to grow as CME futures hit a record high of $841 million. Open interest in the Chicago Mercantile Exchange(CME) BTC futures hit the new all-time high on Wednesday. According to a Cointelegraph report, the increase shows that the interest of professional investors in BTC continues to soar impressively.

On August 11, MicroStrategy Incorporated (NASDAQ: MSTR) announced that it purchased 21,454 BTC at the price of $250 million. In the press release, Michael J. Saylor, CEO of MicroStrategy, revealed the company’s confidence in Bitcoin with the recent investment. He referred to Bitcoin as the most widely-adopted digital asset with more appreciation potential than cash.

With Saylor’s comment, it is obvious that there is still investor interest in cryptocurrency, regardless of bearish comments from critics.

Before now, CME futures achieved an outstanding $440 million open interest in June. Cointelegraph reported that on June 25, open interest in Deribit Bitcoin futures hit its three-month high of $98 million. Also, options open interest at that time was $1.2 billion.

In addition, a chart by Cointelegraph also shows that the CME Bitcoin futures basis has been in a commendable position since mid-March. However, it recently sustained above a 1% premium for ten consecutive days.

The positive basis shows that the price of futures is higher than the spot price. This is called Contango.

CME Bitcoin Options are new to the market as it was recently launched in January 2020. In late June, CME hit a remarkable $440 million open interest. Despite this, Deribit remains the leading futures and trading platform.

At the moment, investors are capitalizing on the right to purchase CME Bitcoin futures at a fixed price. This is known as a strike. The current $171 million CME options open interest is also fully focused on call options since its launch.

With the present state of the market, about 66% of CME open interest will expire on August 28. Along with that, 14% of CME open interest should fully develop towards the end of September.

Furthermore, call options also represent positive strategies. However, they are sometimes used for “covered calls”, which are largely neutral. Covered calls aim to produce a fixed income as long as the underlying asset stays above a certain threshold. To spot call options used for neutral strategies, there is a need for proper observation to know if the open interest rate is lower than current market levels.

Currently, the BTC open interest below $10,000 is 44,700 BTC, which is equal to $514 million. This represents just 28% of the total $1.84 billion open interest. The figures signify bullishness from options markets and also validates CME options analysis.

In August 2019, BTC maintained $12,000 for a week, and then dropped 20% five days later. This, however, is not a worry for investors as they are optimistic that such a decline will not reoccur. 

CME Bitcoin Futures Open Interest Hits New Record High of $841 Million

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