Traders Cautious Despite Spot ETF Optimism
Last month’s filing by BlackRock (BLK) for a spot bitcoin exchange-traded fund (ETF) injected new life into the crypto market, propelling bitcoin (BTC) and related investment vehicles higher.
Nonetheless, participants in the bitcoin-linked perpetual futures market remain risk conservative, refusing to take on large leverage.
Glassnode and Blockware Solutions data show that the ratio of open interest in BTC perpetual futures to bitcoin’s market cap has been trapped in a narrow band of 1.5% to 1.7% over the last four weeks. The ratio is still significantly below the all-time high of 2.6% set in September of last year.
Blockware Solutions analysts report no change in futures traders’ risk appetite despite BTC holding the $30,000 mark for the past month. The low open interest/market cap ratio suggests that spot ETFs will likely drive prices higher in the short to medium term as supply contracts into long-term holders’ hands. Some traders may not see a bitcoin spot ETF as a game changer or worry about regulatory uncertainty impacting market valuations in the short term.
(With inputs from Shikha Singh)
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