Open contracts for Bitcoin (BTC) have hit a record high, after cryptocurrency research company Skew released data on May 8 that showed that Open Interest (OI) in options had gone past $1 billion. The previous all-time high, $970 million occurred on February 14. 

BTC Open Interest hit an all-time high of over $1 billion on May 8. Source.

Bitcoin Futures and Options exchange Deribit accounts for the largest open interest by far, with $954 million in BTC Options OI. It was followed by LedgerX, Bakkt, OKEx and CME. 

The current OI is just under $1 billion but still shows confidence, certainly compared to the Black Thursday of March 12, 2020, when Bitcoin lost roughly 50% of its value. At that time, the OI was at a noticeable low of $410 million, as investors scrambled to save their portfolio by redistributing capital. 

Open interest is generally a strong indication of new capital entering the market - which would be unsurprising, given that the halving and the thought of an upcoming bull run has spurred new investors to invest in the digital asset class. It is also considered to be an indication of trend i.e. increased open interest is seen as having positive sentiment for an asset.

Several reports released over recent months, such as one by blockchain technology company TokenInsight, shows that interest in derivatives has remained strong through 2020, even with the effects of the COVID-19 pandemic. According to TokenInsight, the daily trading volume of futures is roughly $ 12-30 billion, while the daily trading volume of the entire options market is between $0.5-180 million.

However, Bitcoin options are still quite early in its growth when compared to futures, the latter differing from options in that buyers or sellers must make their trade at a predetermined price. Bitcoin, Ethereum (ETH) and EOS (EOS) account for the vast majority of futures activity.

Skew suggests that the market may have recovered from March’s mayhem,