On October 12, the price of Bitcoin (BTC) on the Binance platform exceeded $ 11,700, and the data show that trading in derivative instruments has also begun to rise.
According to Skew, open interest in Bitcoin CME contracts is beginning to recover. The term “open interest rate” refers to the total number of long and short contracts that are open at a given time and is often used to measure trading activity in the futures market.
Daily sales on other enterprise platforms, including LMAX Digital and Bakkt, are also still strong. This indicates that the size of institutions generally grows after the strong growth of BTC.
What’s behind the splash?
Over the past two months, three billion dollar conglomerates have announced major investments in bitcoin.
First, MicroStrategy, a US company listed on NASDAQ, said it had invested $ 425 million in bitcoin. The company said it would look at BTC as its most important asset, mainly as a hedge against inflation.
This was followed by a $ 81 billion payout group with a $ 50 million investment. Square reportedly invested 1% of its portfolio in BTC, demonstrating its reliability in long-term growth.
On October 13, the Cointelegraph reported that Stone Ridge, which manages $ 10 billion in assets, has bought 10,000 BTC. The company is now the third major company in the United States to have made a significant investment in Bitcoin in the last two months.
Following significant investments in Bitcoin from MicroStrategy, Square and Stone Ridge, institutional demand for Bitcoin may naturally increase. Skewed researchers said:
“Open interest in CME #bitcoin futures is improving with the resumption of bear trading. See the COT report this weekend for shorter leveraged sales. ”
Futures data from digital data from digital assets also show significant volume growth in the last two weeks.
BTC futures contract volume after exchange
The volume of BTC futures contracts on the stock exchange. Source: data on digital assets.
It is possible that open interest in CME Bitcoin futures will be restored after the end of a month in September. Each monthly CME futures contract expires on the last Friday of each month. Since the futures market resets after each expiration, open interest falls at the same time.
However, the total growth in volume across different business platforms indicates the probability of an increase in institutional demand.
Whale-to-whale OTC transactions may also increase
Since early October, Whalemap researchers have said that OTC whale-to-whale transactions are increasing.
Whalemap, a platform that tracks whale activity and investors with high net worth, found that personal trades increased significantly, especially before and after major announcements. They said:
“I looked to see if there would be more OTC agreements, and they did. I lean more and more towards the idea that you can see these OTC traders online before the news breaks out. ”
In addition to business activity and an increase in the number of whales, the overall size of the spot market has also increased.
During a trend, high volume is crucial to maintain the bullish momentum, as it shows real interest in bitcoin from retail investors.