- As the price of Bitcoin attempts to reach new all-time highs, there is a significant increase in demand for investment vehicles providing leveraged exposure to BTC.
- According to K33 Research data, the fund saw monthly net inflows of $630 million, placing it just behind BlackRock and Fidelity in terms of inflow volume.
- According to K33 data, the VolatilityShares 2x fund currently has exposure to Bitcoin equivalent to 36,025 tokens.
In addition to spot Bitcoin ETFs in the United States, Bitcoin Futures ETFs are also starting to see high demand: Here are the latest reports!
Bitcoin Futures ETFs Seeing More Interest
As the price of Bitcoin attempts to reach new all-time highs, there is a significant increase in demand for investment vehicles providing leveraged exposure to BTC. Leveraged futures-based exchange-traded funds like the VolatilityShares 2x Bitcoin Strategy ETF (BITX) are experiencing inflows as significant as spot Bitcoin ETFs. According to K33 Research data, the fund saw monthly net inflows of $630 million, placing it just behind BlackRock and Fidelity in terms of inflow volume.
Bitcoin Futures ETFs currently carry exposure equivalent to a record 83,300 tokens, with leveraged Bitcoin ETFs accounting for nearly 25% of the open interest in CME, one of the largest crypto derivatives markets. K33 Research reports that futures premiums on the platform have soared to around 20% alongside the highest open interest.
In a note published on Tuesday, significant inflows into 2x leveraged BTC ETFs were said to reflect a significant increase in demand for leveraged long positions in BTC, consistent with the high risk appetite observed in BTC derivatives. The explosion in open interest on CME was primarily due to “massive inflows” into the funds.
According to K33 data, the VolatilityShares 2x fund currently has exposure to Bitcoin equivalent to 36,025 tokens. As a result, cryptocurrency management nearly doubled in the first 11 days of March.
The growing interest in such funds has accelerated the launch of several new products. ProShares plans to introduce five leveraged long and short BTC ETFs next month to meet rising market demand, while Valkyrie recently launched its 2x leveraged product.
Demand Rising for Leveraged Products
Investors indicate an increasing demand for leveraged bets to capitalize on the ongoing bull run in the crypto market. U.S.-based institutions typically prefer regulated products such as CME-regulated futures and spot ETFs from traditional asset managers.
On the other hand, overseas entities often resort to options contracts on Deribit and perpetual futures on platforms like Binance, which are preferred products among crypto traders.
Critical to leverage in the crypto market are funding rates for Bitcoin perpetual futures, which continue to remain significantly high on major overseas exchanges. Deribit, a leading crypto options trading platform, has also seen a significant increase in both open positions and bullish positions on Bitcoin.
