- Open interest in Bitcoin futures contracts has hit an all-time high this week based on Bitget Research.
- Active futures pumped by $3 billion, from $9 billion to $11.76 billion.
- Bitget’s chief analyst provides insights on the trend.
Bitget Research recently looked into the all-time high (ATH) open interest in Bitcoin (BTC) this week. According to Ryan Lee, Bitget’s chief analyst, the soaring open interest on the Chicago Mercantile Exchange (CME) primarily influenced the trend.
In Blockzeit’s correspondence with Lee, the analyst noted a significant jump in active futures contracts by nearly $3 billion within the week. Specifically, the figures went from $9 billion to $11.76 billion during the period.
Effect of Spot Bitcoin ETFs
Lee mainly attributed the numbers to the noticeable strong net inflow in spot Bitcoin exchange-traded funds (ETFs). So far, the issuers of these financial instruments in the US have already accumulated a total of around $1.8 billion in net inflows in the past four trading days.
The analyst explained that when the US stock market opens, the spot Bitcoin ETF hedges the BTC positions caused by users’ net purchases of the ETF in real time on CME. Due to insufficient forces taking the short side of BTC trades, this has caused a boost in open interest.
Change in Sentiment Over the US Election
The shift in voter sentiment for the US presidential election also fueled the rising open interest in Bitcoin. Citing market data, Bitget Research claimed that the probability of former President Donald Trump winning the election has gone uphill to 60%.
Since the Republican candidate is now a known advocate of Bitcoin and cryptocurrencies, his higher chances could trigger another “Trump trade” effect in the books as the countdown to the November election nears its end.
If the former president manages to maintain his momentum on the way to the momentous occasion, investors bullish for a Trump win may likely turn to trading Bitcoin contracts to capitalize on the situation.
Crypto Liquidity Remains Undervalued
Lee considers the current liquidity in the crypto market undervalued. The expert pointed out that core assets like Bitcoin and Ethereum (ETH) have been undergoing a “corrective rally.” However, traders have been showing a lack of willingness to provide liquidity or increase their leverage.
The analyst concluded that investors should continue to monitor the inflows in Bitcoin ETFs. These would indicate whether or not Bitcoin has what it takes to breach a new top before the election. He added that BTC’s potential rally by then would certainly trickle down to the overall crypto market, particularly altcoins.
