Yeliz Akmaca 
Binance has regained its position as the largest venue for Bitcoin futures open interest, overtaking CME. This shift coincides with consecutive outflows from U.S. spot Bitcoin ETFs, reflecting institutional investors reducing positions. Market timing suggests a turning point as risk increasingly moves toward shorter-term trades.
CME Breakdown Highlights Institutional Retreat
CME’s open interest began declining just before the sharp market movements in October. The drop from $17 billion to $9.8 billion is largely linked to decreased profitability of the “basis trade” strategy, frequently used by institutional investors. This structure, which involves buying spot Bitcoin while selling futures contracts, lost its appeal as the futures price premium narrowed.
Velo data shows the annualized basis rate fell from around 15% to roughly 3%, signaling a disrupted risk-reward balance for institutional capital and making position reduction a rational choice. CME open interest once peaked at $23 billion when Bitcoin approached $100,000, highlighting the scale of the recent unwind.
Retail Investors Push Positions Higher
Open interest on Binance also fluctuated since October but shifted upward in December. Retail investors’ dip-buying behavior has driven futures positions higher, even as institutional participation remains cautious. This divergence shows that shorter-term, higher-risk trades are gaining weight, while it remains unclear whether this trend is permanent or a temporary reaction.
ETF Outflows Signal Caution, But Story Isn’t Over
U.S. spot Bitcoin ETFs reflect waning institutional interest. Farside Investors data shows net outflows of $19.3 million on Monday, marking the seventh consecutive day of withdrawals.
BlackRock’s iShares Bitcoin ETF (IBIT) saw $7.9 million in redemptions, while Fidelity’s FBTC recorded $5.7 million in modest inflows. ARK 21Shares and Invesco Galaxy products also show continued institutional liquidation, reflecting both year-end tax optimization and heightened market caution.
Bitcoin Price Volatility Persists, Risks Partially Rise
Bitcoin dropped more than 2% over the past 24 hours, trading around $87,200. Intraday fluctuations ranged between $86,717 and $90,299, while trading volume increased roughly 40%, indicating sustained market interest despite uncertainty.
Technically, analysts note that Bitcoin is approaching the lower bands of the rainbow chart, historically a zone between $60K and $80K, associated with weaker market phases. CoinGlass data shows mixed sentiment in the derivatives market; total futures open interest fell over 5% in 24 hours, with CME declining and Binance seeing a slight increase in the short term.
The market has yet to clarify whether institutional sell-offs or retail buying will dominate, but current data suggest that risk still leans downward.
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