Bitcoin derivatives reached new heights, as the open interest (OI) in Bitcoin futures hit a record high of $40.5 Billion on October 21. This is according to a CoinGlass report.
The Chicago Mercantile Exchange, or CME, holds the largest open interest in Bitcoin futures, with a share of 30.7%.
Binance is next with 20,4% and Bybit with 15%.
Bitcoin reaches $70,000 mark
Bitcoin’s nearing $70,000 price coincided with the surge in interest.
Open interest is the value or number of outstanding futures contracts which have not yet expired.
It is a good indicator of the market and investor activity in Bitcoin derivatives.
Increased leverage can lead to increased market volatility.
Market movements can be significant when there are periods of high open interest, especially if prices change dramatically.
These conditions can lead to cascading sales, forcing Bitcoin prices down and resulting in forced spot sales.
In August, Bitcoin’s price plummeted almost 20% and fell below $50,000 within two days.
Bitcoin’s early trading on October 21 reached $69 380 but was met with resistance and pulled back to $69 033.
According to CoinGecko, cryptocurrency is currently 6.4% short of its all-time highest of $73,738 as of today.
Altcoins like Ether and Solana outperformed Bitcoin on recent daily gains.
Ether grew by 3.5% to $2,750, while Solana gained 6%, bringing it close to $170. Since then, both assets have experienced a slight drop from their recent highs.
Bitcoin Open Interest Surges As Trump’s Winning Odds Rise
Bitcoin’s surge up to a 3-month high is a result of markets anticipating the upcoming U.S. Presidential election on November 5.
The dollar has been boosted by the rising odds of Donald Trump, the former president, winning the election.
It is expected that his proposed tariffs and tax policies will maintain higher U.S. rates of interest, possibly weakening the currencies of trading partners.
Trump’s improved election odds gave Bitcoin a noticeable boost, as his administration was viewed as having a more lenient approach to cryptocurrency regulation.
Bettors prefer Trump to Harris on Polymarket with 61 per cent versus 38 per cent.
The market is now focused on corporate earnings and potential risks associated with the U.S. presidential election, as there are no major economic events planned for this week.
Chris Weston is the head of research for Australian online broker Pepperstone . He told CNBC that traders are faced with a critical decision regarding whether or not to intensify their election-related trading. There are only 15 days until the next general election.
Weston said that the best way for investors to protect themselves against Trump’s tariffs is to take long positions against the dollar against the Euro, Swiss Franc and Mexican pesos.
Brad Bechtel is the global head of FX for Jefferies. He echoed that view and emphasized that rising interest rates are driving the dollar’s strength against these currencies.
