The excitement around the world's first cryptocurrency is gaining momentum, as evidenced by a record high of $31 billion in terms of open interest (total number of outstanding Bitcoin futures or options contracts in the market). The previous record of $24.3 billion was set in April 2021.
The funding rate has been at record levels for at least the last six months, suggesting a significant preponderance of buyers in the derivatives market.
The second-highest weekly net inflows into exchange-traded crypto funds this year ($1.8 billion) also points to the high demand. Some 94% of the inflows came into Bitcoin. Record-breaking weekly inflows of $2.45 billion were registered two weeks ago.
This was not without a spoonful of tar in a barrel of honey – the Grayscale crypto fund, which switched from a trust to spot, experienced heightened outflows again. This is now predominantly driven by the high fund management fee of 1.5% versus 0.2–0.3% for competitors. Last week, Grayscale's GBTC posted $1.4 billion in withdrawals, and the fund has lost a total of $9 billion since the relaunch.
Bitcoin's potential is also evidenced by outflows from gold ETFs. Recently, investors have increasingly contrasted these assets, which have similar limited reserves and store of value status.
However, Bitcoin ETFs are showing much more vigour. For example, a BlackRock fund took just 39 days from launch to rack up 10 billion in investments. The first gold ETF in the U. S. took more than two years to achieve such a feat.
Price dynamics in 2024 are also not in favour of gold, which is up just 2.6% compared to 58.3% for Bitcoin.
Forecasts are being revised upward as quickly as Bitcoin breaks new records. Bitwise Chief Investment Officer Matt Hougan believes that due to strong demand, the price could reach $200k or higher before the end of this year.
StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)
