Open interest in Bitcoin futures on CME hit an all-time high as the total assets of crypto mutual funds also surged.
Institutional capital inflows into cryptocurrency funds and futures is increasing sharply following news of the launch of a first ETF of Bitcoin in the U.S.
As we reported earlier, this week the world’s first exchange-traded fund (ETF) will debut on the New York Stock Exchange (NYSE). Bitcoin. This is the ETF of ProShares, which is linked to futures of Bitcoin and that will begin trading on the NYSE tomorrow, Tuesday, October 19. The milestone appears to be causing a stir, drawing investors into the cryptocurrency space.
CME records all-time high for open interest in BTC futures
According to data from Bybt, open interest in the futures of Bitcoin has reached an all-time high on the Chicago Mercantile Exchange (CME) amid the euphoria over the arrival of the first ETF.
The CME posted a record of USD on Monday$ 3.6 billion in open futures contracts of Bitcoin, surpassing the previous high of USD $ 3.26 billion registered in February 2021. The total open interest in the futures of Bitcoin it has also exceeded $ 23 billion for the first time in five months.
Open interest is the total number of futures contracts held by market participants at the end of the trading day. It is used as an indicator to determine market sentiment and the force behind price trends, as well as representing new money entering the market.
It should be noted that the futures of Bitcoin allow investors to gain exposure to the major cryptocurrency without having to keep the asset. These leverage-intensive operations are settled in cash; that is, investors receive dollars instead of Bitcoin once the contracts are settled.
Sentiment in the cryptocurrency market has exploded for several weeks, fueled by rumors of the entry of a first ETF based on Bitcoin to Wall Street. Although the US Securities and Exchange Commission (SEC) has rejected all requests for funds of this type for nearly a decade, a first ETF has finally been approved.
Cryptocurrency enthusiasts had waited for an ETF approval for a long time, anticipating the event as a major milestone that could usher in a widespread adoption trend.
Cryptocurrency funds also see increases
In addition to driving open interest in the futures market and driving the price of Bitcoin above $ 60,000 for the first time since May, the news has also led to an increase in the total volume of total assets under management in cryptocurrency funds tracked by CoinShares.
According to a recent report by CoinShares, the Total assets of institutional managers reached USD $ 72.3 billion for the week ending Sunday October 17, which represents the highest level ever recorded. By comparison, institutional cryptocurrency holdings were worth $ 57 billion in March and hit $ 71.6 billion in May.
In total, Cryptocurrency mutual funds posted about $ 80 million in inflows in the past week. The products of Bitcoin attracted the largest investments with USD $ 70 million, marking the fifth consecutive week of entries.
Although investors were also interested in some investment vehicles linked to the main altcoins. According to the report, institutional investors increased their holdings of products Polkadot (DOT) and Cardano (ADA) in USD $ 3.6 million and USD $ 2.7 million, respectively. Meanwhile, the products Ether (ETH) posted minor outflows totaling $ 1 million.
In terms of funder, ETC Group and 21Shares they registered the highest weekly entries with USD $ 63.6 million and USD $ 19.3 million, respectively. On the other hand, the entries in the products Grayscale, which represent the largest crypto-focused funds, saw no increase.
ETF could lead to greater institutional adoption
The increase in fresh capital to the market occurred when the price of Bitcoin it rose 12% last week, amid expectations and rumors of an ETF. The price action also boosted the major cryptocurrencies in the market.
At the moment, while the SEC still has dozens of similar fund proposals to review, experts anticipate that this first ETF could pave the way for approval of upcoming crypto investment products, as well as lead to the entry of a greater number of funds. liquidity to the market. The team of CoinShares wrote about it in his report:
The recent SEC decision to allow a futures-based ETF in the United States could generate more significant inflows in the coming weeks as American investors begin adding positions.
Amid the news of the ETF’s debut ProShares, Grayscale reiterated that it is working vigorously to convert its fund Grayscale Bitcoin Trust (GBTC) in an ETF. The administrator had already announced such plans in April this year, but his optimism about the launch of such a product has increased in light of the recent SEC approval.
Hannah Estefanía Pérez’s version / DailyBitcoin
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