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In the second quarter, the Chicago Mercantile Exchange (CME), a leading derivatives provider, experienced unprecedented engagement in its regulated bitcoin (BTC) and ether (ETH) futures, with an impressive influx of participation from major traders.

In an email sent to CoinDesk, the CME reported that the average number of large open interest holders, referring to entities holding a minimum of 25 bitcoin futures contracts, reached a record high of 107 during the second quarter. Additionally, throughout the same quarter, there was an average of 62 large open interest holders for Ether (ETH) futures.

"Bitcoin futures institutional interest continued to increase throughout the quarter as investors sought regulated venues/products to hedge rising market volatility and manage risk and exposure," the exchange said, explaining the robust participation from large traders.

The regulation of CME futures falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC). For bitcoin futures, there are two contract types: the standard contract, which represents 5 BTC, and the micro contract, which is one-tenth the size, representing 0.1 BTC. As for ether futures, the standard contract size is 50 ETH, while the micro futures contract size is one-tenth of 1 ETH.

The CME's regulated and cash-settled futures have always been the top choice for institutions seeking to invest in cryptocurrencies without the need for actual ownership.

The remarkable surge in engagement by major holders coincided with the extension of the first-quarter rally in the top cryptocurrencies. Over the course of three months until June, Bitcoin experienced a notable 7% increase, contributing to an impressive overall surge of 84% during the first half of the year. Meanwhile, Ether also demonstrated substantial growth, gaining an impressive 61% in the initial six months of the year.

CME reported that the surge in demand for hedging tools propelled trading volumes and open interest in BTC and ETH futures and options to unprecedented levels in the first half of the year.

Trading volume is the total number of contracts traded on a particular day, while open interest refers to the total number of active contracts at any given time. An upsurge in open interest indicates a significant influx of new capital into the market.

The chart shows the increase in trading volumes and open interest in futures and options tied to bitcoin and ether. (CME)

Open interest in standard bitcoin futures contracts reached a remarkable average of 14,800 contracts during the first half of the year, representing a substantial 15% increase compared to the previous year in 2022. Simultaneously, open interest in bitcoin options soared to an impressive average of 9,400 contracts, indicating a staggering 175% surge when compared to the figures in 2022.

The CME intends to introduce futures linked to the ether-bitcoin ratio in the upcoming month, pending regulatory approval. Recently, the exchange has broadened its range of options products by adding weekly expiries for both bitcoin and ether.

Source Coindesk