CME's crypto derivatives reach new highs as traders seek safe port in storm

Quick Take

  • The volume and open interest of bitcoin options reached an all-time high on CME in January.
  • Institutional crypto traders are avoiding unregulated or semi-regulated platforms following the collapse of FTX, said Steven Zheng of The Block Research. “CME appears to be the beneficiary of this cautiousness.”

Derivatives trading giant CME Group has clocked a record high in volume and open interest for bitcoin options as traders flock to the venue in the wake of the FTX meltdown.

Bitcoin options volumes on CME hit $1.1 billion on Tuesday, and more than $736 million in open interest, according to data from The Block Research.

Caution among institutional trading firms in the wake of Sam Bankman-Fried's FTX bankruptcy could be one force behind the surge in activity on CME, said Steven Zheng, research director at The Block Research.

CME Group, which launched bitcoin futures in May 2021, offers crypto trading in options and futures in bitcoin and ether.

Given the collapse of FTX, Zheng said, institutional crypto traders are a lot more cautious of trading on unregulated and semi-regulated platforms, adding that "CME appears to be the beneficiary of this cautiousness."


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That's supported by other traders who spoke with The Block, including one options traders who requested anonymity and said: "Counterparty risk def a big fear for institutional traders — CME is obviously trusted."

"Prediction long-term would be that some traditional exchange ends up getting majority of volume, but Deribit still [is] the monster in the space by a lot currently," he added.

In general, crypto options are a more popular trading product for institutional investors than they are for retail investors, especially compared with crypto futures products. 

Zheng said this preference might help explain why CME's crypto options are up while its futures products are not.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions. 

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].


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