Institutional ‘Takeover’ of Crypto Continues as CME OI Surges

Open Interest on one of the world’s largest exchanges continues to increase as proof.

According to data from Skew analytics, Open Interest on the Chicago Mercantile Exchange (CME) has surpassed that of retail exchange Binance and taken the second spot.

The move was noted by long-term Bitcoin trader Nick Cote who likened it to an ‘institutional takeover’.

Institutional take over of crypto going as planned.

Remember when it was crypto vs institutions.
Those sure were the days. https://t.co/2IEuCstGmn

— Nick Cote (@mBTCPiz) October 23, 2020

Open Interest is a measure of the total number of outstanding derivative contracts, such as options or futures that have not been settled for the asset, in this case, Bitcoin.

Previously, exchanges such as BitMEX dominated for derivatives but since the legal proceedings against its executives, there has been somewhat of an exodus from the embattled exchange.

OKEx OI is approaching a billion dollars which has been a historical rejection point, while CME is not far behind now with almost $800k. Aggregated OI across all the major exchanges has hit a monthly high of $5 billion according to the analytics provider. Bakkt comparably has very little OI with just $15 million.

Binance still leads the way for 24-hour futures volumes however with $4.75 billion according to Skew. Huobi and OKEx are second and third at $3.5 and $2.9 billion respectively.

The Institutions Cometh

Grayscale assets under management (AUM) continues to surge with the latest figure at $7.3 billion according to the institutional crypto trust provider.

10/22/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $7.3 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/3hYTEDAzTj

— Grayscale (@Grayscale) October 22, 2020

The largest trust offering exposure to Bitcoin markets is now worth $6 billion which is more than the total AUM just two weeks ago.

As reported by CryptoPotato, Grayscale marked Q3 as its best quarter yet with over $720 million of Bitcoin inflows.

The big players in finance are certainly paying attention now, billionaire hedge fund manager Paul Tudor Jones III recently stated he liked Bitcoin even more now than when he first added it to portfolios in May. Meanwhile, veteran trader Peter Brandt attributed this rally to the increasing involvement of institutions.

Crypto Market Outlook

At the time of writing Bitcoin was still dominating crypto market momentum. Total capitalization was near its highest level this year, close to $390 billion according to Tradingview.com. It has increased by over 110% since the beginning of the year.

For the past two years, the fourth quarter has been bearish but 2020 seems to be following the 2017 pattern, ending the year on a bull run.