Bitcoin futures markets are currently experiencing an influx of money flows, with traders seemingly making bets on price movements amid an increase in crypto-ETF filings. According to reports, open interest on bitcoin futures has increased to over $11 billion, marking the highest level since May last year when Terra collapsed. The increase in open interest could mean that more money is flowing into the market or that existing traders are increasing their allocation. Nonetheless, this metric can help experts to determine market sentiment while providing insights into the strength behind price trends.
Data from Coinalyze shows that open interest previously hit these levels in May 2022 and has mostly lingered around the $8 billion level since late April. The rise in Bitcoin futures trading coincides with a bump in volumes and buying activity on Bitcoin options markets, primarily used by sophisticated investors to hedge against price swings or make leveraged bets on Bitcoin movements. Financial experts believe this trend will likely continue should ETF requests from traditional finance leaders such as BlackRock get approved in the coming months.
Alex Adelman, the CEO of bitcoin rewards app Lolli, shared that “Bitcoin’s rally is part of a more significant trend signaling a shift towards Bitcoin as a distinctly strong and established store of value.” Adelman noted that recent ETF applications from industry leaders such as Fidelity, Invesco, and BlackRock display that new regulations are finally providing the green light for these institutions to launch bitcoin-based merchandise and meet customer demand. Observers have also noted that the cryptocurrency market’s buzz has increased significantly lately, attracting more mainstream investors.
According to CoinDesk, bitcoin futures’ asset flows are seeing the most significant increase in over a year as a result of traders betting heavily on bitcoin’s price movements amidst a flurry of crypto ETF applications. This growth is a sign that institutional investors and mainstream investors are becoming increasingly interested in the cryptocurrency market. Thus, cryptocurrency enthusiasts believe the market is set to continue its expansion and emerge into a more prominent asset class.