If you weren’t paying attention, you might have missed it: Solana’s SOL futures began trading on Monday on the Chicago Mercantile Exchange (CME), the primary marketplace for U.S. institutions. Unlike past landmark launches for bitcoin (BTC) and ether (ETH) on the CME, this one went largely unnoticed.
On its first day, the product had a notional daily volume of $12.3 million and ended with $7.8 million in open interest—significantly lower than the debuts of BTC and ETH futures, according to data from K33 Research. For comparison, BTC futures kicked off in December 2017 with a first-day volume of $102.7 million and $20.9 million in open interest; ETH futures launched in February 2021 with volumes of $31 million and open interest of $20 million.
Faced with pressures from a decline in speculative memecoin activities, bearish trends in the crypto market, and even a poorly received commercial, SOL dropped about 10% from its weekend peak, underperforming bitcoin’s and ether’s declines of 4.5% and 3.8%, respectively.
While SOL’s launch may appear unimpressive in absolute terms, K33 analysts Vetle Lunde and David Zimmerman pointed out that when adjusted for market capitalization, its figures align more closely with those of BTC and ETH. On Monday, Solana’s market cap was approximately $65 billion, much smaller than ETH’s $200 billion and BTC’s $318 billion when they debuted on the CME.
The timing of Solana’s CME launch was also less than ideal, as prevailing market conditions significantly influence futures activity, K33 observed.
In contrast to bitcoin’s CME futures, which debuted at the height of the 2017 bull market amid intense speculative enthusiasm, and ETH’s launch that aligned with the initial altcoin rally of 2021 and news of Tesla’s BTC purchase, SOL futures commenced trading in a bearish market climate and lacked significant bullish drivers, according to K33. “It seems that the institutional appetite for altcoins may be limited, especially considering SOL’s launch occurred in a much more conservative market context,” K33 analysts stated.
Read more: Multicoin’s Samani Explains Why SOL ETF Could Surpass ETH’s
Derivatives trader Josh Lim, the founder of Arbelos Markets, recently acquired by a prime broker, remarked that the CME offerings provide fresh opportunities for institutions to manage their exposure to Solana, regardless of initial demand. FalconX executed the first SOL futures block trade on CME on Monday in collaboration with StoneX.
“Interest in this new CME product has been strong,” Lim communicated via Telegram. Liquid funds will have the means to adjust their SOL exposure, especially those who acquired locked tokens during the FTX liquidation process. Moreover, ETF issuers planning to launch SOL-focused products may start with futures-based ETFs linked to CME offerings.
“The significant impact of these new CME products is being overlooked,” Lim pointed out. “They are poised to revolutionize how hedge funds access altcoins.”