Solana Futures on CME: An Underwhelming Start Compared to BTC and ETH

Overview

Solana’s SOL futures became available on the Chicago Mercantile Exchange (CME) on Monday, marking their official entry into the market with a notable daily volume of $12.3 million but an open interest of only $7.8 million. This performance is notably sparse compared to the launches of bitcoin (BTC) and ether (ETH) futures.

Despite the humble appearance of these numbers, adjustments for market capitalization indicate that Solana’s figures are not as disparate from BTC’s and ETH’s at launch, according to insights from K33 Research.

Key Points

Solana’s futures kicked off trading with a notional daily volume of $12.3 million and $7.8 million in open interest, trailing behind the inaugural performances of BTC and ETH futures.
Adjusting for market valuation, SOL’s debut volumes come closer to BTC’s and ETH’s, K33 analysts noted.
The launch is viewed by industry representatives as a critical new avenue for institutional investors to diversify their investment in Solana tokens, remarked Joshua Lim, the Global Co-Head at FalconX.

Further Insights

The $12.3 million volume took place amid challenging market dynamics and dwindling speculative activities, adversely affecting SOL’s performance compared to its Bitcoin and Ethereum counterparts.

In historical context, BTC futures started at the height of the 2017 bullish trend while ETH futures launched during an optimistic phase in 2021. In contrast, the SOL futures debuted under a bearish trend devoid of significant driving factors or enthusiasm.

Market Adjustments

Analysts from K33 assert that, once market capitalization is factored in, the numbers for SOL’s first day are less concerning. On the CME launch day, Solana’s market cap was approximately $65 billion, contrasting with the $200 billion for ETH and $318 billion for BTC.

Conclusion

Despite the perceived shortcomings in its inaugural trading, SOL’s launch corresponds to a pivotal moment for how institutional market players might interact with altcoins amid a risk-averse climate. Joshua Lim emphasizes that the introduction of this CME product represents a transformative shift for hedge funds in their engagement with altcoins.