CME Bitcoin futures activity drops to a 14-month low, possibly due to basis trading becoming ineffective, triggering institutional fund withdrawals

ME News Report, April 10 (UTC+8), the Chicago Mercantile Exchange (CME) Bitcoin futures market continued to weaken, data shows that the average open interest (OI) for March 2026 has fallen below $8 billion, further dropping to about $7.2 billion in early April, hitting a new low since February 2024, and declining for the fifth consecutive month. At the same time, March’s monthly trading volume dropped to $163 billion, nearly halving from the peak in January 2025. Market analysis indicates that this decline is mainly due to the large-scale unwinding of “basis trades,” where institutions previously profited from the spread by buying spot ETFs and shorting CME futures. This was the core driver behind the growth in CME positions. However, as Bitcoin’s price retreated from a high of $120k to below $70k, the annualized basis return was significantly compressed. Currently, about 5% of the basis return is close to the risk-free rate of approximately 4.5%. After factoring in funding costs and counterparty risk, arbitrage opportunities have essentially disappeared, prompting leveraged funds to withdraw. (Source: ChainCatcher)