CME Bitcoin Hits Record, $36K Uncertainty Persists


CME Bitcoin Futures Hit Record High

CME Bitcoin futures open interest surged to an all-time high of $3.65 billion on November 1, reflecting a growing interest in cryptocurrency derivatives. However, while CME futures demonstrate bullish momentum, Bitcoin’s price movement remains uncertain.

Institutional Interest Grows

The number of active large holders of Bitcoin reached a record 122, highlighting the increasing interest from institutional investors in the cryptocurrency.

High Premium Raises Concerns

The Bitcoin CME futures premium reached a 15%, significantly higher than the typical 5%–10% range in neutral markets. This suggests strong demand for long positions but also raises concerns about potential reliance on the approval of a spot Bitcoin exchange-traded fund (ETF).

Contradictory Signs from Options Markets

While CME futures show optimism, the Bitcoin options markets reveal a demand for protective put options, as indicated by the put-to-call open interest ratio at the Deribit exchange reaching its highest levels in over six months.

Price Hinges on Spot Exchange Flows

Despite the activity in the derivatives market, Bitcoin’s price ultimately depends on spot exchange flows. A rejection at $36,000 led to a 5% correction, showing the significance of price movements in the spot market.

External Factors

Bitcoin’s recent correction occurred independently of traditional financial markets, with the Russell 2000 Index futures gaining 2.5%. The stability of gold prices during this period also suggests Bitcoin’s price was not impacted by external factors.

Assessing Supply Uncertainty

Determining the available supply between $36,000 and $40,000 remains uncertain. Reduced Bitcoin availability on exchanges may not be an indicator of investor confidence but rather concerns related to legal challenges and growing institutional demand for derivatives.

Lingering Uncertainty

The cryptocurrency market faces lingering uncertainty as growing institutional demand for Bitcoin derivatives may not be directly linked to spot market dynamics. The cryptocurrency’s price around $36,000 remains untested since April 2022.


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