CME Open Interest indicates Institutions are finally paying attention to Bitcoin

in GEMS4 months ago

Institutions finally starting to participate in Bitcoin?

Since about 2017, the holy grail of bitcoin investing has often been said to be institutions showing up in mass...

The idea was that they would pick up the mantle from mostly retail and usher bitcoin to prices never before seen.

Well, they may finally be starting to get involved.

We don't have a great measure for institutional involvement beyond the activity at Grayscale and the activity in the Bitcoin Futures/Options markets since those are predominantly institutional investors.

Well, the open interest at the CME exchange on their bitcoin futures products is at all time highs...

Check it out:

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(Source:

1266790717004931077) twitter metadata:ZGFuX3BhbnRlcmF8fGh0dHBzOi8vdHdpdHRlci5jb20vZGFuX3BhbnRlcmEvc3RhdHVzLzEyNjY3OTA3MTcwMDQ5MzEwNzcpfA== ~~~

Cool, but why do I care about open interest?

Open interest is a reflection of market activity.

The more participants and activity in a particular market the more open interest we would likely see.

Which is why increase open interest is often used as a proxy for money flows, IE when open interest is going up it means money is flowing into that product/market and conversely when open interest is going down it means money is flowing out.

The open interest being at all time highs right now for bitcoin indicates that there is more participation than at any point previously in these CME bitcoin futures products...

Which, as mentioned previously, likely means there is more institutional involvement than at any point previously.

But wait there's more...

Not only is open interest at all time highs, but the put to call ratio has been dropping steadily since the halving peak in bitcoin's price.

This may sound a bit counterintuitive as some might have expected there to be a "sell the news" type of setup where people would look for a dip post halving...

image.png

(Source:

1266795115374206976) twitter metadata:Q3J5cHRvQnJvb2tpbnN8fGh0dHBzOi8vdHdpdHRlci5jb20vQ3J5cHRvQnJvb2tpbnMvc3RhdHVzLzEyNjY3OTUxMTUzNzQyMDY5NzYpfA== ~~~

The Put/Call ratio continues to drop from .81 at the halving peak to .55 currently.

Despite the halving already happening and the recent price increase, investors are not becoming more bearish, they are becoming less bearish.

Which is an interesting development and possibly the opposite of what one might expect.

This is just another data point that points to the fact that bitcoin is likely going much higher in the not too distant future.

Stay informed my friends.

-Doc

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I smell a liquidation coming 😂

Long squeeze?

possibly

The time is changing day by day..it’s time to liquid coins..

What do you mean?

I mean people will be more interested in bitcoins in near future 😍