- The Chicago Mercantile Exchange Groups had only introduced the Bitcoin option products at the start of 2020.
- On June 26th, a chain of Bitcoin options contracts (both quarterly and monthly contracts) had expired together.
- The value of the expired products altogether had amounted to a total of just under $1 billion.
Chicago Mercantile Exchange Group is a global leader in terms of offering a diverse derivative options market. The CME provides a variety of featured products in cryptocurrencies, agriculture, metals, and so on. As of Bitcoin options, there are notably two of its featured products, namely, Bitcoin Futures and Options on Bitcoin Futures. Bitcoin Futures has an open interest of about 8165 and Options on Bitcoin Futures has an open interest of 3397.
In June CME Constituted a Total Of 20% of The Option Market Shares
In recent times, we have seen the Bitcoin options market unleashing itself with the total open interest increasing exponentially across all major platforms and exchanges.
The Chicago Mercantile Exchange Groups had only introduced the Bitcoin option products at the start of 2020. CME was always considered a king in the Bitcoin options trading because of its dominance over 20% of the entire bitcoin options market. In June, it stood in the second position in terms of Bitcoin market options just next to Deribit, the Panama based cryptocurrency exchange.
CME’s Share Deprecated From 25% to 15%
Per the report, later that month, on June 26th, a chain of Bitcoin options contracts (both quarterly and monthly contracts) had expired together. The value of the expired products altogether had amounted to a total of just under $1 billion.
But the sudden and huge cumulative expiration may have hit CME hard. Consequently, the investor’s interest in option contracts has depreciated, and the company has started to lose shares in the Bitcoin options market.
The total open interest for the Bitcoin option markets plunged from a huge $1.8 billion to a low of $894 million. Hit hard by the contract expiry, CME’s interest had declined by approximately 67% in just 24 hours and the open interest plunged from $439 million to $145 million. Adding to more miseries, CME’s number of shares in the total open interest declined from 25% to 15%, marking the end of CME’s dominance over the Bitcoin options market. More importantly, Deribit’s shares over the Bitcoin options market have received appreciation by 8%.
CME May Find It Challenging To Recover From This Huge Blow
This is awful news because CME didn’t just see growth in the Bitcoin options market because in may CME’s Bitcoin futures had exhibited a 29% increase in open interests in just 30 days. This sudden blow could potentially hamper CME’s growth in the Bitcoin derivatives market. With a decline so strong, it may become hard for CME to compete again with Deribit, Bakkt, OKEx, and LedgerX in the options market.