ETF Applications Trigger Rise in Open Interest in Bitcoin

• The increasing demand for Bitcoin options has pushed the open interest (OI) to nearly $15.1 billion, approaching an all-time high.
• According to Deribit, approximately $116 million worth of Bitcoin options will expire on July 6.
• A larger impact on the markets could come from the expiration of approximately $1.7 billion worth of options contracts on July 28.

ETF applications are boosting interest in Bitcoin: Open positions in Bitcoin are on the rise, and according to option data, traders are still bullish.

Traders are Returning to Bitcoin

Professional investors are returning to Bitcoin funds following the applications for spot Bitcoin ETFs by leading asset managers such as BlackRock and Fidelity Investments.

This is indicated by blockchain analytics firm Glassnode, which reported that open interest (OI) for options contracts has reached $13.8 billion.

Additionally, the increasing demand for Bitcoin options has pushed the open interest to nearly $15.1 billion, approaching an all-time high. The company added:

“This shows that market participants are increasing their exposure to risk-defined derivative instruments.”

Increasing Demand for Bitcoin Options

Open interest refers to the total number of outstanding derivative contracts. For every buyer of a futures or options contract, there must be a seller. Options are similar to futures contracts but without a fixed settlement date and with the option to renew or extend.

According to Deribit, approximately $116 million worth of Bitcoin options will expire on July 6. However, this is a relatively small amount compared to previous expirations. The expiration of approximately $1.7 billion worth of options contracts on July 28 could have a larger impact on the markets.

Furthermore, it was noted that the put (short) / call (long) ratio for these contracts is 0.81. This means there are slightly more call options, indicating a slight bullish bias.

The ratio is calculated by dividing the number of put (short) contracts by the number of call (long) contracts. Values below 1 are typically considered bullish as there are more traders in long option contracts.

Bitcoin futures trading also saw an increase last month. According to data provided to the U.S. Commodity Futures Trading Commission, the number of investors holding at least 25 BTC futures positions increased from 94 at the end of May to 121 in the last week of June.