Key takeaways:
The open interest in CME’s futures for the top four cryptocurrencies has reached $28.3 billion, outpacing Binance’s $23 billion and Bybit’s $12.2 billion.
Even though CME leads in open interest, unregulated exchanges continue to dominate trading volumes, particularly in altcoin and perpetual futures.
The cryptocurrency market crash on Friday resulted in a record loss of $74 billion in leveraged positions across the industry. Prices rebounded to recover more than half of those losses within hours, but the impact on futures open interest was already significant, signaling a potential “end of an era” for unregulated cryptocurrency derivatives markets.
Exchanges experienced substantial liquidations and auto-deleveraging as traders’ margins fell short, allowing the traditional Chicago Mercantile Exchange (CME) to lead in Bitcoin (BTC), Ether (ETH), Solana (SOL), and XRP (XRP) futures. CoinGlass reported a record-high of $19.2 billion in total liquidations, with the effective number likely much higher due to some exchanges underreporting data.
CME’s aggregate futures open interest in the top four cryptocurrencies hit $28.3 billion on Wednesday, exceeding Binance’s $23 billion and Bybit’s $12.2 billion. While this is a significant step toward institutional capital influencing price discovery, it does not imply that exchanges have lost their competitive edge.
CME leads open interest, but trading stays on exchanges
Binance still leads the smaller altcoin futures market with $7 billion across assets like (BNB), (DOGE), (HYPE), while Bybit accounts for another $4.4 billion. Additionally, the top three exchanges—Binance, OKX, and Bybit—collectively trade over $100 billion daily in BTC, ETH, SOL, and XRP futures, compared to CME’s average of $14 billion per day.
Even as CME establishes itself as the leader in open interest, trading activity remains concentrated on lesser-regulated cryptocurrency exchanges, where perpetual futures contracts (inverse swaps) prevail over weekly or monthly expiries.
The Bitcoin futures open interest at CME was reported at $16.2 billion on Wednesday, reflecting an 11% decrease from $18.3 billion before Friday’s crash. In contrast, Binance observed a sharper 22% drop during the same timeframe. This discrepancy is mainly due to Binance’s higher leverage, wider use of cross-collateral, and a much larger share of retail traders.
The intricate liquidation process related to portfolio margin, coupled with a sudden flash crash in various cryptocurrencies on Binance, activated auto-deleverage mechanisms across the broader market, disrupting pricing oracles used by decentralized exchanges. CME futures were not impacted, as trading halts occur at 4:00 PM Central Time on Friday and resume on Sunday.
Related: Crypto ‘got a passing grade’ on weekend crash: Bitwise’s Matt Hougan
Furthermore, CME futures are cash-settled and necessitate a maintenance margin of around 40%, limiting traders to 2.5x leverage. In contrast, unregulated cryptocurrency derivatives platforms often provide leverage up to 100x and accept a diverse range of collateral, including altcoins and synthetic stablecoins.
CME intends to introduce 24-hour trading for futures and options in early 2026, pending regulatory approval, a potential move that could increase demand and possibly shift trading volumes away from crypto exchanges. However, CME’s current lead in open interest does not inherently signify the “end of an era” for unregulated cryptocurrency derivatives markets.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
