Key Points:
CME's open interest in the four major cryptocurrencies has reached $28.3 billion, surpassing Binance's $23 billion and Bybit's $12.2 billion.
Although CME leads in open interest, unregulated exchanges still dominate in trading volume, especially in altcoins and perpetual futures.
Last Friday's cryptocurrency market crash led to a record $74 billion in leveraged positions being liquidated within the industry. Experts point out that while prices recovered more than half of their losses within hours, the damage to futures open interest has already been done. This extreme volatility triggered an unexpected shift in market dynamics, potentially marking the "end of an era" for the unregulated cryptocurrency derivatives market.
As traders faced margin calls, exchanges encountered massive liquidations and automatic deleveraging, allowing the traditional Chicago Mercantile Exchange (CME) to gain a leading position in Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and Ripple (XRP) futures. The total liquidation amount reported by CoinGlass reached a record $19.2 billion, while analysts believe the actual figure should be much higher, primarily due to some exchanges underreporting their data.
As of Wednesday, CME's total open interest in the four major cryptocurrencies reached $28.3 billion, exceeding Binance's $23 billion and Bybit's $12.2 billion. Industry experts indicate that while this marks an important step in price discovery driven by institutional capital, it does not mean that exchanges have lost their competitive edge.
Binance still maintains a dominant position in the small-cap altcoin futures market, with approximately $7 billion allocated across contracts for Binance Coin (BNB), Dogecoin (DOGE), HYPE, and similar assets, while Bybit holds an additional $4.4 billion. Notably, the top three exchanges—Binance, OKX, and Bybit—collectively have daily trading volumes exceeding $100 billion in BTC, ETH, SOL, and XRP futures, while CME's average daily trading volume is only $14 billion.
Despite CME emerging as a leader in the open interest market, trading activity remains highly concentrated on cryptocurrency exchanges with looser regulations, which primarily focus on perpetual futures contracts (inverse swaps) rather than weekly or monthly expiry contracts.
Data shows that as of Wednesday, CME's Bitcoin futures open interest was $16.2 billion, down 11% from $18.3 billion before last Friday's market crash. In contrast, Binance experienced a more significant decline of 22% during the same period. Industry analysts note that this difference is mainly due to Binance's higher leverage ratios, broader use of cross-collateralization, and its market structure with a significantly larger proportion of retail traders.
The complex liquidation processes related to portfolio margin, combined with the sudden flash crashes of various cryptocurrencies on the Binance platform, triggered automatic deleveraging mechanisms across the broader market, while also disrupting the price oracle systems used by decentralized exchanges. CME futures, however, were unaffected by such events, as trading stops at 4:00 PM (Central Time) on Fridays and resumes on Sundays.
Another significant distinction is that CME futures are cash-settled and require approximately 40% maintenance margin, effectively limiting traders' leverage to about 2.5 times. In contrast, unregulated cryptocurrency derivatives platforms typically offer leverage of up to 100 times and accept various forms of collateral, including a range of altcoins and synthetic stablecoins.
CME plans to launch around-the-clock futures and options trading services in early 2026 and is currently awaiting regulatory approval. Market experts believe this move could stimulate greater market demand and potentially shift trading volume away from traditional cryptocurrency exchanges. However, under the current circumstances, CME's leading position in open interest does not imply that the unregulated cryptocurrency derivatives market has reached the "end of an era."
Related: Opinion: The Maturity of Cryptocurrency Requires Systematic Discipline, Not Speculation
This article is for general reference only and should not be considered legal or investment advice. The views, thoughts, and opinions expressed in the article are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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