Bitcoin futures volume rises to $ 40 billion, highest since March collapse

Bitcoin’s recent surge in prices has been accompanied by explosive volume in its derivatives markets.

According to data from Skew Analytical, aggregate open interest in Bitcoin futures markets (or the total value of pending trades) is reaching $ 5 billion, the most since before Bitcoin’s price fell during Black Thursday’s fall to mid March.

Since open interest reflects the total value of all active derivative contracts in a given market, high open interest generally denotes healthy investment activity, especially if the underlying asset is rising in price.

Furthermore, the daily Bitcoin futures trading volume on Monday, when the price of Bitcoin increased 12% to approximately $ 11,300, reached its second highest figure in history. Aggregate volume of futures in the regulated and unregulated Bitcoin futures markets headed $ 40 billion yesterday.

That’s only outpaced by the $ 50 billion the futures market posted on Black Thursday, March 12, the day the price of Bitcoin dropped along with a macro market selloff that left stocks and even precious metals in the red. . By context, the daily volume in the Bitcoin futures markets had not exceeded more than about $ 15 billion in the past 30 days.

This near-record volume reflects the immense buying pressure that has sent Bitcoin above $ 10,000. The recovery in Bitcoin prices comes at a time when silver and gold are also on the rise, and one explanation for the rise is that investors are looking for alternative assets to hedge against inflation as central banks continue to increase fiscal and monetary responses to economic uncertainty.

As usual, most of this volume comes from unregulated Bitcoin exchanges offering derivatives, notably OKEx, Binance, Huobi, and BitMEX. But Bitcoin’s regulated markets are also thriving in the midst of the previous period.

The CME futures market experienced its second best day on record with a volume of $ 1.3 billion. Bakkt, a relative newcomer that launched late last year, had its best day yet with $ 122 million in Bitcoin futures volume.

In light of the news that American banks can now hold digital assets, the growing volume in Bitcoin’s institutional grade markets could be a sign that high-net worth investors are turning to Bitcoin now more than ever.