Data calculated by Finbold indicates that bitcoin futures open interest on various exchanges has grown by 133.74% between January and March 30, 2021, from $9.66 billion to $22.58 billion. In February, the value was at $10.88 billion.
The spike in bitcoin futures open interest reflects the surge in the asset’s price, initiated mainly by the entry of institutional investors into the sector.
Institutions might be considering adding more bitcoin to portfolio
The report explains what the rising bitcoin open future means in relation to institutional investors. According to the research report:
“The growth in open interest might also indicate institutions from traditional finance are considering adding more bitcoin exposure to their portfolios. As institutional investors continue hedging using futures, the demand for leverage increases.”
Elsewhere, gold futures open interest has plunged between January and March 2021 by 17.54%, from $116.30 billion to $95.90 billion. In February, the value of gold open interest futures was $107.7 billion. During this period, the price of gold has also plunged by at least 9%.
The analysis explains why gold open interest futures have plunged. According to the research report:
“The open gold futures have plunged in the first three months of 2021, correlating with the precious metal’s price fluctuations. The decreasing open interest in gold suggests that the buying power is drying up, and thus at least a corrective downswing is to be expected.”
The growth in bitcoin open futures offers validation for cryptocurrency supporters to believe the asset will eventually replace gold as the store of value. However, despite bitcoin surging, it is still miles away from surpassing gold in terms of the value of the open interest futures.
