24.10.2021

CME Ethereum Futures Daily Trade Volume Hits $75.8M, OI Rises to $62M

Ethereum Accumulated by Institutions Will Most Likely Never Be Sold. The Ethereum being accumulated by institutions such as Grayscale has a high probability of never being unlocked from the proverbial vaults.

According to Nate Maddrey of CoinMetrics Research, such digital assets will remain in the corresponding trusts indefinitely as explained below.

A key feature of Grayscale’s trusts is that there is no way to redeem the underlying crypto, at least for now. So when BTC or ETH is deposited into the trusts it stays there indefinitely.

This trust supply sink becomes even more powerful when mixed with Chicago Mercantile Exchange (CME) futures. CME futures give institutional investors another way to get exposure to crypto derivatives, both long and short.

Institutional investors can take advantage of the Grayscale Bitcoin Trust premium by simultaneously depositing BTC into the trust (in exchange for GBTC shares priced at NAV) while shorting BTC on CME. This allows them to remain market neutral and pocket the premium on GBTC.

CME recently launched ETH futures which means more ETH will likely start to get locked into the Grayscale Ethereum Trust, at least as long as there’s a premium.

In brief:

  • The daily trade volume of the CME Ethereum futures hits $75.8M 9 days after launch
  • Open interest on the CME Ethereum futures has hit $62M
  • These numbers point towards institutional demand for Ethereum trading products
  • Grayscale has accumulated 194,522 ETH in the last 30 days further confirming institutional demand

It has been roughly nine days since the CME Ethereum futures were launched, and the derivatives product is gaining popularity amongst institutional investors. This is according to an analysis by the team at Glassnode that pointed out that the daily trade volume of the CME Ethereum futures, has risen to $75.8 Million. This amount is also a 90% increment from Friday’s daily trade volume of $40 million.

The impressive growth in the daily trade volume of the Ethereum derivative product is a confirmation of institutional demand for ETH. Furthermore, the open interest of the CME Ethereum futures has hit $62 million as summarized in the following tweet by the team at Glassnode.

Grayscale Accumulates 194,522 ETH in 30 Days

Demand for Ethereum by institutional investors is also evident through the continual accumulation of ETH by Grayscale Investments. According to data from Bybt.com, Grayscale has accumulated 194,522 ETH in the last 30 days, and since it reopened its Ethereum trust this year. This amount of Ethereum is the equivalent of roughly $350 million using an ETH rate of $1,800.

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