CME Bitcoin Futures Activity Hits 14-Month Low, Possibly Triggered by Basis Trade Ineffectiveness Leading to Institutional Fund Withdrawal

Odaily News The Chicago Mercantile Exchange (CME) Bitcoin futures market continues to weaken. Data shows that the average daily open interest (OI) for March 2026 has fallen below $80 billion, dropping further to approximately $72 billion in early April, marking the lowest level since February 2024. This decline represents the fifth consecutive month of decrease. Meanwhile, the monthly trading volume for March dropped to $1.63 trillion, nearly halving from the peak in January 2025.

Market analysis indicates that this round of decline primarily stems from large-scale unwinding of "basis trades." Previously, institutions drove the core growth in CME positions by purchasing spot ETFs and shorting CME futures to capture spread profits. However, as the Bitcoin price retreated from the $120,000 high to below $70,000, the annualized basis spread has significantly compressed. The current basis spread of around 5% is approaching the risk-free rate level of approximately 4.5%. After factoring in funding costs and counterparty risks, the arbitrage opportunity has essentially vanished, prompting leveraged funds to withdraw. (The Block)