Average daily CME Bitcoin futures open interest (OI) fell to under $8 billion in March and $7.2 billion in early April, the lowest reading since February 2024.

OI has also been declining for five consecutive months since November. Meanwhile, CME monthly volume also dropped to $163 billion in March, down nearly 50% from its January 2025 peak.

One probable reason for these declines is the unwinding of the basis trade.

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The CME-spot ETF basis trade (buying spot ETFs, shorting CME futures, collecting the spread) was the primary driver of institutional CME positioning. The annualized basis compressed in recent months as BTC fell from its highs above $120,000 to under $70,000.

When the basis yield drops below the risk-free rate plus capital costs, the trade is dead as leveraged funds unwind. As a result, CME has also lost its position as the largest Bitcoin futures exchange to Binance for the first time since November 2023.

It is also worth noting that CME’s April OI figure is approaching February 2024 levels, before the spot ETF rally took off. If CME OI falls below that threshold, the market will have fully round-tripped the entire institutional positioning layer that built up around the ETF narrative.

The key metric to watch is the CME basis rate relative to short-term Treasury yields. At ~5% basis versus ~4.5% risk-free, there's essentially zero incentive to run the trade with its associated capital requirements and counterparty risk for now.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.