Binance has overtaken CME as the largest exchange for bitcoin (BTC $87,886.25) futures open interest (OI), according to CoinGlass. Binance now holds roughly 125,000 BTC ($11.2 billion), edging past CME’s 123,000 BTC ($11 billion).
The shift is driven by a decline in the profitability of the basis trade, where traders buy spot bitcoin while selling futures to capture the price spread. CME’s OI began the year at 175,000 BTC but has steadily fallen as returns from this strategy diminished. Binance, favored by retail traders for directional bets, has maintained steady OI throughout the year.
A year ago, CME’s OI hit a record 200,000 BTC as bitcoin surged toward $100,000, with the annualized basis rate peaking near 15%. Today, that rate has compressed to roughly 5%, according to Velo data, signaling lower returns for institutional basis traders.
As spot and futures prices converge and market efficiency improves, arbitrage opportunities continue to shrink. CME had led bitcoin futures OI since November 2023, driven by institutional positioning ahead of spot bitcoin ETFs in January 2024, but that advantage has now faded.
