Bitcoin Futures Open Interest Targets Record as BTC Price Nears $10K

Bitcoin (BTC) derivatives have returned to the spotlight this week as price moves appear to spark a surge in open interest.

Data from on-chain analytics resource Skew showed open interest for CME Group’s Bitcoin futures nearing record highs in U.S. dollar terms this week.

Bitcoin futures open interest passes $450M

After falling following Bitcoin’s block subsidy halving in May, the downtrend continued through last month before rebounding over the past seven days.

Daily volume easily topped $300 million during the week, while open interest passed $450 million and was on course to top its all-time high of $532 million at press time.

Open interest refers to the total value of derivatives contracts that have yet to be settled. High open interest coupled with low volume tends to suggest a speculative setup among investors, and the rebound in volume provides a reassuring sign that a sell-off may be averted.

This week alone, however, open interest has soared by more than 30% as BTC/USD reclaims support levels at around $9,500.

CME Bitcoin futures 6-month chart. Source: Skew

Big money is already in Bitcoin

As Cointelegraph reported, institutional investor activity has once again become a topic of interest for analysts. This week, U.S. regulators formally allowed chartered banks to offer crypto custody, leading to projections of intense price growth should banks get serious about Bitcoin investment.

According to asset manager Capriole’s Charles Edwards, a mere 1% asset allocation to BTC would spark a price surge that would eclipse 2017’s peak of $20,000.

“It's not hard to see where this is going,” he added.

Grayscale, the investment giant that now owns more than 2% of the Bitcoin supply, recorded institutional inflows of $1.4 billion for the first half of the year.