Bitcoin (BTC) has come closer to the $2 trillion market capitalization milestone for the first time, after the price increased by $30,000 since Donald Trump's victory in the US presidential election earlier this month.
Currently at $1.94 trillion, BTC needs to reach around $101,000 to hit this important mark. BTC price has surpassed $98,000 today, and its market dominance has reached a peak of 61.8%.
According to data from Coinglass, the open interest (OI) of BTC futures contracts on the Chicago Mercantile Exchange (CME) has reached a record high of 218,000 BTC ($21.3 billion), more than a third higher than before the November 5 election. The increase in OI as prices rise is a sign of bullish sentiment in the market.
"The increase in CME's OI shows no signs of slowing down; it has consistently reached new ATHs," said Vetle Lunde, research director at K33. "The growth in CME's OI over the past 15 days has exceeded the average nominal OI on CME before 2022."
Lunde noted that the active and direct participants in the market are behind this price surge. This group is directly involved in the futures market, while some of the momentum may come from futures-based ETFs like the ProShares Bitcoin ETF (BITO).
The introduction of options linked to ETFs in the US will also be a key driver for the growth of CME futures contracts.
As Bitcoin's role becomes larger and more closely tied to the traditional financial system (TradFi), its volatility is likely to decrease over time. According to Glassnode data, actual volatility has decreased from over 100% to around 40% in recent years.
Cash-margined contracts have also reached new ATHs. These contracts use stablecoins or USD as the underlying collateral and are essentially non-volatile in nature, in contrast to crypto-collateralized assets which are inherently volatile.
CME only uses cash-margin for its open contracts in the futures market, while centralized retail-focused exchanges like Binance have been willing to accept crypto-margined contracts. CME dominates the futures contract OI with 33%, while margin is still increasing.
Data from Glassnode also shows that the ratio of futures contracts margined with cryptocurrencies instead of cash is at an all-time low of 16%. The lower this ratio, the lower the volatility in Bitcoin prices.
With Bitcoin (BTC) on its way to $100,000, traders are using 2x leveraged Long ETF options linked to the stock price of MicroStrategy, the publicly-traded company with the largest Bitcoin holdings, to amplify their profits.
The Defiance Daily Target 2X Long MSTR ETF, trading under the ticker MSTX on Nasdaq, aims to provide twice or 200% of the daily performance of MSTR stock. This ETF has surged 20%, reaching a peak of $180 briefly on Tuesday, as MSTR rose 10% to $473.
Meanwhile, trading volume in options linked to ETFs has spiked, with market participants rushing into higher-strike (OTM) call options at the $230 level.
Demand for the $230 strike call options spans multiple expiries, including contracts set to settle on June 20, 2025. Call options give the buyer the right, but not the obligation, to purchase the underlying asset at a predetermined price on or before a specific date. This allows buyers to control a large position in the underlying asset while paying a small insurance premium upfront, thereby amplifying potential profits.
The extreme bullishness is reflected in the MSTR options market, where recent call options have traded at record-high premiums compared to put options typically used to protect against downside.
Similar strong upward flows have emerged on the CME, Deribit, and the newly-launched options tied to BlackRock's spot Bitcoin ETF, hinting at a retail investment frenzy and increased speculative activity that often precedes market corrections.
This frenzy is occurring as expectations of a more accommodative management approach from Donald Trump and the Fed's interest rate cuts drive BTC higher. The top market-cap asset has set a new peak above $98,000 today, bringing its monthly gain close to 40%.
You can view the BTC price here.
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Viet Cuong
Bitcoin Magazine
