Bitcoin has once again made the headlines as the bulls seem to be in complete control of the market as bitcoin has shattered multiple resistances to overcome $17,000 and quickly breaking past $18,000 in the following hours. The rally seems to be fuelled by institutional players and backing up this claim is CME Group’s cash-settled bitcoin futures, which has hit an all-time high open interest of $1 billion.
The reports of the recent spike in open interest or the value of outstanding derivative contracts that are yet to be settled along with bitcoin’s current rally is hinting that fresh money is flowing into the market. Hence, crypto enthusiasts are expecting a short term rise in bitcoin’s volatility.
The report also emerges aftermarket leaders in traditional markets, like Stanley Druckenmiller and Bill Miller, shared optimistic views regarding bitcoin. The previous record high of $948 million was also preceded by renowned investor Paul Tudor Jones, who revealed that he owns bitcoin and wants to enter the bitcoin futures market.
As of now, data from blockchain analysis firm Messari states that bitcoin has rallied 144% in 2020. Talking about this and CME’s recent growth, the firm’s spokesperson noted:
“The number of large open interest holders (LOIH) is once again at a record 102 holders and we are averaging 101 holders so far in November.”
CME’s growth compared to other exchanges is “indicative of institutional investors wanting exposure to bitcoin,” according to Phillip Gradwell, chief economist for the blockchain surveillance software firm Chainalysis. It also displays “the increasing separation of fiat and pure crypto markets,” he noted.
Earlier this year, CME also began trading in bitcoin options. Aggregate open interest in the bitcoin options market is also on the rise and recently touched $3.8 billion.
Grayscale owning massive amounts of Bitcoin
On the other hand, New-York based asset management firm Grayscale Investments revealed that the firm now oversees $10.4 billion in a variety of assets including bitcoin, bitcoin cash, ether, horizen, ether classic, litecoin, stellar, XRP and zcash.
In terms of Bitcoin, Grayscale now holds to $8.35 billion worth of Bitcoin, which is approximately 2.69% of Bitcoin’s outstanding supply and market cap. The firm has seen heavy demand among institutional players when it comes to paying a premium to buy and hold cryptocurrency via the security of a regulated fund.
The firm’s Bitcoin Trust currently represents $15.62 worth of Bitcoin each going as high as $18.86. This is approximately a 19% premium. Over the past six months, the total BTC held by the firm has risen by 50%. This is a massive spike considering the fund launched seven years ago, hinting at snowballing institutional interest.