Bitcoin Futures Open Interest Nears Record High of $5.2 Billion on CME Amid Rising Value
Summary:
The open interest for Bitcoin (BTC) futures has risen to $5.2 billion on Chicago Mercantile Exchange (CME), nearing its record high from October 2021. The increase is concurrent with a 26% rise in Bitcoin's value over the past month. Analyst Tony Sycamore suggested that this trend was driven by elements beyond the potential approval of spot exchange-traded fund (ETF) products, pointing to the Federal Reserve's signal to begin reducing interest rates as a main driver of Bitcoin's price surge.
Bitcoin (BTC) futures' open interest has climbed to $5.2 billion on the worldwide derivatives behemoth, Chicago Mercantile Exchange (CME). This figure is nearly reaching its highest ever peak of late October 2021 by just $200 million. According to data from Coinglass, over the past month, CME's Bitcoin futures' open interest has seen a steep rise from $3.63 billion to its current state of $5.20 billion. This growth runs in tandem with the 26% rise in Bitcoin's value over the same period, with the digital currency now worth a bit over $44,000.
The open interest in Bitcoin futures on CME has seen a dramatic spike of $1.46 billion to $5.45 billion between October 1 and 21 of 2021. Along with this, Bitcoin's price also experienced a sharp rise from $45,000 to $66,000. Tony Sycamore, an analyst from IG Australia, informed Cointelegraph the significant increase in open interest signifies a renewed intrigue in Bitcoin. However, it does not give any insight into how the traders at CME are positioned.
Sycamore referred to CME's report dated November 28 to the United States Commodities Futures Trading Commission (CFTC) illustrating that the major players on their platform were net short, with 20,724 short positions against 18,979 long positions. Until the latest report from CME emerges on December 12, investors won't have a clear understanding of the CME traders' positions. According to Sycamore, what they can't decipher is whether the key players have flipped from a net short to a net long position.
Sycamore suggests that the huge rise in Bitcoin's value is not merely due to speculative activity surrounding the approval of a series of spot exchange-traded fund (ETF) products by the SEC. Sycamore believes there's more contributing to this trend. He believes the recent Bitcoin surge is more linked with the general economic environment, attributing it to the Federal Reserve's announcement to start lowering interest rates which likely drove the price action.
In November, CME ousted Binance to secure the top spot in Bitcoin futures open interest. This was viewed by many as a sign that conventional financial institutions are starting to lean towards crypto products more significantly. Conversely, a number of analysts are uncertain whether the current Bitcoin rally will last. Following a potential approval, some experts predict a 'sell the news' style event in the aftermath.
Published At
12/6/2023 4:42:11 AM
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