Bitcoin Options Open Interest Surges to All-Time High of $2 Billion

• CME bitcoin options open interest hit an all-time high of almost $2 billion, indicating more activity from sophisticated traders and higher liquidity
• Call options volume outweighs put options volume for December expirations, signaling bullish sentiment in the bitcoin market
• Traders are betting on interest rate cuts starting in March 2024, which could benefit bitcoin further with lower rates

The Chicago Mercantile Exchange (CME) has seen a surge in bitcoin options open interest, reaching an all-time high according to data from The Block. This signals greater liquidity and participation in CME’s bitcoin futures and options markets.

The Growth in Open Interest

Open interest on CME bitcoin options contracts has climbed to almost $2 billion in outstanding positions over the last 24 hours. Data from Velo and Coinglass confirms this new high water mark for the CME. Rising open interest generally indicates more activity from sophisticated traders and higher liquidity.

Bullish Sentiment

The majority of open interest is weighted toward call options rather than puts among December expirations. When call volume exceeds put volume, it is viewed as a bullish sign for the market.

Outlook for Interest Rates

Traders are betting on interest rate cuts in 2024, expecting the Fed to reduce rates starting in March 2024. This aligns with probability forecasts from the CME FedWatch tool. Lower rates could further benefit bitcoin.

Conclusion

Record high bitcoin options open interest at the CME group suggests growing institutional demand and expectations for a bull run over the coming years. More traders are gaining exposure to bitcoin via the CME, which offers regulated futures and options contracts. Greater adoption and liquidity for these products could continue driving open interest to new levels.