Bitcoin derivatives (BTC) have returned to the spotlight this week as price movements appear to trigger a surge in open interest.
Data from the chain analysis resource Skew showed open interest in CME Group’s Bitcoin futures approaching all-time highs in US dollar terms this week.
Bitcoin futures open interest exceeds $ 450 million
After falling after Bitcoin’s block grant halved in May, the downtrend continued until last month before recovering in the past seven days.
Daily volume easily topped $ 300 million during the week, while open interest topped $ 450 million and was on track to hit its all-time high of $ 532 million at press time.
Open interest refers to the total value of derivative contracts that have not yet been settled. High open interest coupled with low volume tends to suggest a speculative configuration among investors, and the rebound in volume provides a reassuring sign that a sell-off can be avoided.
However, this week alone, open interest has soared by more than 30% as BTC / USD claims support levels at around $ 9,500.
6-month chart of CME Bitcoin futures. Source: biased
There is already a lot of money in Bitcoin
As Cointelegraph reported, the activity of institutional investors has once again become a topic of interest to analysts. This week, US regulators formally allowed authorized banks to offer cryptocurrency custody, leading to projections of intense price growth if banks take Bitcoin investment seriously.
According to asset manager Capriole Charles Edwards, a mere 1% asset allocation to BTC would trigger a price increase that would overshadow the $ 20,000 peak of 2017.
“It is not difficult to see where this is going,” he added.
Grayscale, the investment giant that now owns more than 2% of Bitcoin’s supply, posted institutional inflows of $ 1.4 billion for the first half of the year.
