Bitcoin open interest jumps 25% since BlackRock ETF filing

Open interest for bitcoin futures contracts on Chicago Mercantile Exchange (CME) is now at its highest point since March 2022.

There’s $2.98 billion worth of contracts open on CME, per Coinglass, and total bitcoin open interest across derivatives exchanges has swelled to yearly highs.

• About $3 billion has been injected into the futures market over a two-week period — from 11.4 billion to $14.4 billion.
• The surge began around June 19, a few days after BlackRock filed for its spot ETF. 
• BTC is now up 22% since BlackRock’s filing and more than 85% year-to-date, trading at $30,800.

Large players continue to drive up derivative market activity following excitement over a possible approval for the US’s first spot bitcoin ETF, K33 said in a research note.

“Institutional activity remains elevated,” K33 senior analyst Vetle Lunde said in the report. “BTC ETPs globally have experienced significant inflows since the BlackRock announcement, pointing towards a substantial institutional demand to add BTC exposure.”

Funding rates for perpetual contracts also remain positive above a reading of 0.01%. Funding rates, calculated by the exchange, turn positive when markets skew bullish and turn negative amid bearish sentiment.

Bitcoin, at least for now, appears somewhat linked to future developments in the spot bitcoin ETF space. The SEC is yet to approve such a fund despite dozens of attempts over the years.

BlackRock was forced to refile its ETF bid last week, pushing back the 240-day time period in which the SEC can make a decision (although that timer won’t start until the application hits the Federal Registrar).

Bitcoin’s halving event is due in approximately 294 days. Bitcoin halvings have historically presented as a bullish catalyst, but the sample size — only three — is too small to be scientific.

“Bitcoin could thus benefit from a solid halving narrative and ETF expectations as we enter 2024,” Lunde said. “Both should lead to significant strength in BTC, reflecting positively on the market in Q1 2024.”

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