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Bitcoin’s value has been on an impressive rise over the past month, and by the start of the week, the leading digital currency surpassed the $57,000 range for the first time since Nov. 2021. This upward trend in value has stimulated bitcoin-based derivatives, causing open interest in bitcoin futures to hit an unprecedented level, exceeding past records set in both 2021 and 2017.
Record-Breaking Bitcoin Futures Activity Propels Open Interest Beyond $24 Billion
Bitcoin (BTC) derivatives have witnessed a significant uptick in terms of open interest and overall volume in bitcoin futures since mid-October 2023. Open interest (OI) in derivatives markets is defined as the total number of unsettled derivative contracts, such as futures, that remain active.
Essentially, it serves as an indicator of the influx of capital into the bitcoin derivatives market. At present, the open interest figures for bitcoin futures have reached an all-time high (ATH) of $24.44 billion as of Feb. 27, 2024.
The latest ATH surpassed the OI recorded the day before BTC hit $69K per unit in November 2021, with $23.06 billion reported on the 9th. The record set on Feb. 27 also exceeded the OI reached on April 13, 2021, which was just shy of the record at $24.27 billion, or a mere $170 million lower than Tuesday’s peak.
Similar to other market signals, the measurement of bitcoin futures OI can offer insight into trader sentiment. Generally, when OI is increasing, the trend is typically bullish, and when OI is decreasing, the trend leans toward bearish sentiment.
CME Group leads the bitcoin derivatives market in terms of futures open interest (OI) with 137,550 BTC, equivalent to $7.77 billion, and commands a sizable 31.79% of the total market share on Tuesday. Binance follows closely in second place with 108,280 BTC or $6.13 billion in OI, and Bybit takes the third spot with $4.10 billion.
Okx is also a significant player in the market with $2.47 billion in bitcoin futures OI. Other prominent exchanges in terms of BTC futures OI include Bitget, Bingx, and Deribit. In addition to the strong performance of bitcoin futures, bitcoin options OI has also been notably high.
Although the current figure has not surpassed the BTC options OI recorded in December 2023, it has already exceeded the highs of April and November 2021. On Tuesday, Feb. 27, the price of bitcoin on spot markets reached a high of $57,315 on Bitstamp at 7:59 a.m. Eastern Time.
What do you think about bitcoin futures’ open interest skyrocketing to all-time highs? Share your thoughts and opinions about this subject in the comments section below.