Binance claims top spot in BTC futures open interest as institutional demand softens

Binance has overtaken CME as the largest exchange for bitcoin (BTC $87,886.25) futures open interest (OI), according to CoinGlass data. Binance now holds roughly 125,000 BTC ($11.2 billion in notional value), just ahead of CME’s 123,000 BTC ($11 billion).

The change is driven by a sharp drop in the profitability of the basis trade, where traders buy spot bitcoin while selling futures to capture the price spread. CME’s OI started the year at 175,000 BTC but has steadily declined as returns from this strategy waned. Binance’s OI, however, has remained steady, buoyed by retail traders favoring directional bets.

Over a year ago, CME’s OI hit a record 200,000 BTC as bitcoin rallied toward $100,000, with the annualized basis rate peaking around 15%. Today, that rate has compressed to roughly 5%, according to Velo data, signaling diminished returns for institutional basis traders.

As spot and futures prices converge, arbitrage opportunities continue to shrink. CME had led bitcoin futures OI since November 2023, driven by institutional positioning ahead of January 2024’s spot bitcoin ETF launches. That edge now appears to have faded.