Open interest of Bitcoin futures reaches record level on major exchanges

  • Data collected by Skew Markets shows that open interest in Bitcoin Futures reached record levels on all major exchanges.
  • The global open interest for Bitcoin Futures is over $4 billion and is up 60% compared to 2019.

Skew Markets has shared data on the increase in open interest for Bitcoin futures on the global market. According to Skew the open interest on large exchanges exceeds $4 billion and shows a 60% increase over 2019.

BitMEX and OKEx make up the bulk with $2.5 billion in open interest. Following are Huobi ($0.7), Deribit ($0.26), Binance ($0.2), FTX ($0.11), Kraken ($0.06) and Bitfinex ($0.01).

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This rise in open interest is recorded in the best ever first quarter (Q1) that Bitcoin’s price performance has seen in the last 7 years. According to Skew Markets, in 2019 Bitcoin’s return on investment in Q1 was 10.34%. In the first quarter of 2018, BTC had a negative return of -50.74%. Both years are relevant for Bitcoin’s performance, as the chart below shows. In Q1 2019 Bitcoin was still recovering from the bear market that affected the BTC price throughout 2018, after falling from its ATH.

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Although January may be too early to make a prediction about Bitcoin return performance for the entire quartal, Skew Market weights Q1 2020 with a 29.04% positive return. Q1 2017 had a positive return of 11.21% and then presented a record increase of 226.28% in the Q4 of that year.

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Cash-settled Bitcoin futures gain ground at Bakkt

Skew Markets also provided data on the performance of the newly introduced Bitcoin Futures settled in cash on Bakkt. As reported by CNF, the cash-settled Bitcoin futures were introduced on December 10, 2019. The exchange made the decision to launch these financial derivatives to compete with the CME. The cash-delivered contracts were listed on the ICE Futures Singapore and can be used without restriction globally.

During the month of January this year, Bakkt has also seen a 1,600% increase in physically delivered Bitcoin futures. According to the Bakkt Volume Bot, it has recorded 232 physical delivered Bitcoin futures, worth $8 million. However, this increase is unlikely to be sustained because investors may choose to buy cash settled Bitcoin futures.

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As further Skew Markets’ data shows, this could be happening right now as cash futures continue to gain market share. The chart below shows how the volume of cash contracts has been catching up with the physical contracts over the past few days. The maximum daily volume of physical contracts stood at $32 million on January 31, while cash contracts stood at 12 million. Since January 20, according to Skew Markets, physically settled futures contracts have steadily lost ground to cash settled futures contracts.

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About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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