The recent spike in open interest and trading volumes for Bitcoin (BTC) Futures has been drawing a lot of attention from crypto markets in recent weeks. Despite the recent market sell-off, open interest in the derivatives has remained high, with several main exchanges recording a significant increase in the month of March.
The recent increase is a sign that institutional investors are feeling bullish about the future of the crypto asset class, as the open interest in BTC Futures indicates the presence of institutional money in the market. By buying cryptocurrencies in a regulated environment, these institutions have more confidence when it comes to trading digital assets, as they know the risks they’re taking are more contained.
In March of 2020, the open interest of BTC Futures went up 12.5%, with most of the volume originating from the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE). On the CME, open interest has grown by an incredible 83.3% since the start of the year, reaching a new all-time high of $4.2 billion. This is the highest figure since the exchange launched BTC Futures in December of 2017.
Meanwhile, the open interest of CBOE Futures has increased by 44.6% in March, showing that institutional investors are bullish about the future of Bitcoin. On the other hand, open interest on the exchange has decreased slightly since the start of the year, as it has only increased by 11.7%.
It remains to be seen if the increase in open interest will eventually lead to a bullish momentum for Bitcoin, or if it is just a temporary trend. Nevertheless, it is an interesting indicator of institutional interest in the crypto asset class. There is no doubt that the open interest spike in BTC Futures is an encouraging sign of institutional investors entering the market.
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