According to CoinDesk, the Chicago Mercantile Exchange (CME) experienced a 35% increase in total derivatives trading volume in January, reaching $94.9 billion. This surge coincided with the approval of spot bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC). The trading volume for bitcoin futures on CME rose 42% to $73 billion in January, marking the highest recorded trading volume for the exchange since October 2021.
The approval of spot bitcoin ETFs in the US is a significant milestone for institutional investors, as these products provide exposure to the world's largest cryptocurrency by market value. CME is a Chicago-based firm that offers a wide range of financial, commodity, and agricultural futures and options. Large institutions use CME to trade bitcoin futures, which are derivatives contracts that require buyers to purchase bitcoin at a predetermined price at a later date.
However, the exchange also saw a decline in bitcoin futures open interest (OI) and bitcoin options volume. Open interest fell 8.50% to $4.42 billion, while bitcoin options volume dropped almost 30% to $1.57 billion. According to a report by CCData, this trend suggests a deleveraging and end of speculation for institutional investors who speculated on the spot bitcoin ETF approval catalyst. Meanwhile, ether futures trading volume on CME rose 15.6% in January, with ether options trading volume increasing by 27%, as attention shifted to the possibility of ether ETF approval by the SEC later this year.
