Bitcoin Futures Open Interest Declines on CME, Increases on Deribit
Bitcoin futures open interest on the Chicago Mercantile Exchange (CME) has dropped by over $1 billion since January 10, while open interest in derivatives on Deribit has grown, according to Deribit Chief Commercial Officer Luuk Strijers.
Difference in CME and Deribit Open Interest Trends
Strijers suggests that the decrease in CME futures open interest may indicate that investors from traditional finance sectors are adjusting their investment strategies. With the introduction of spot ETFs, these investors may find them to be a more straightforward and efficient way to gain exposure to cryptocurrencies.
Market Becoming Less Volatile
As the expiry date for outstanding options and futures contracts approaches, Strijers notes that the market is recovering from the initial shocks of the ETF introduction and GBTC unwind. The Deribit Volatility Index for bitcoin has decreased significantly, along with a decline in the annualized futures basis figure.
Investors Favoring Deribit Options
In addition to the factors mentioned above, Strijers suggests that investors are finding more value in using options on Deribit for hedging, speculative purposes, and obtaining exposure. The relative stability on Deribit indicates that non-U.S. investors are relying on options for their different risk profiles and strategic purposes.
Hot Take: Shift Towards Spot ETFs and Deribit Options
The decline in Bitcoin futures open interest on CME suggests a shift in investor behavior towards spot ETFs and options on Deribit. Traditional finance investors are adapting their strategies to take advantage of the ease of trading and lower costs associated with these alternatives. As the market becomes less volatile, investors are finding value in using Deribit options for hedging and exposure. This trend highlights the growing importance of spot ETFs and options as preferred investment tools in the cryptocurrency market.
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