Bitcoin Futures Surge Could Signal Imminent Approval Of First U.S. Bitcoin ETF

In Chicago, home of the Chicago Board of Trade (CME Group), rumors of buying and selling news cases seem to be on everyone’s lips.

the world’s largest regulated futures and options exchange. Rumors of the matter have been circulating for weeks, and if the US Securities and Exchange Commission used a Bitcoin ETF as collateral instead of a spot Bitcoin, it could approve the creation of a Bitcoin ETF. There are opinions on this.

As a result, the amount of funds held in Open Interest Contracts (OI) for Bitcoin futures has been increasing since early September. Consider Open Interest as an investor partner so you can focus on marketing. CME data shows 10,918 futures contracts for OI BTC as of October 12, an increase from 4,556 contracts (+72%) over 6 weeks, which is a minus from the start of the year. -February.

According to a recent Forbes report, a small number of traders play an important role on the demand side, which is reflected in the growth of CME futures OI. While the identities of these companies are protected by the CME and CFTC reporting protocols, the methods highlighted in the CFTC Merchant Liability Report are companies and financial institutions based outside the United States that have detailed insight into the Industry offerings.

Shows that you have. It also shows that they are mature enough to get into the futures market and have sufficient capital to do so with large sums of money – each BTC futures contract is worth 5 bitcoins. Yes, it costs around $287,625 at typical Bitcoin prices. Hedge funds have also provided liquidity in recent weeks. Think of liquidity as the money buyers need to find sellers, according to CME Group’s trading rules.

The identity of the trading group involved in the 72% growth Oct. 5-12 won’t be revealed until Sunday when the CFTC releases its new COT report. However, it has been known since Tuesday night that the weekly increase in OI BTC futures exceeds 2,000 contracts. This is a very high weekly change.

This leap in CME crypto futures doesn’t seem like the time. The value of all OI crypto futures fell to a record high on October 5, at $3.3 billion. Bitcoin is already higher than in April, when it was still trading at a record high of $64,900. In other words, there is little reason to tie up so much capital unless informed CME futures investors expect major positive developments before the contract expires. One possible reason is that we expect a Bitcoin ETF to be approved soon. CME futures are known to make a huge difference and may have already started when they hit it.

Future changes

The future importance of Bitcoin backing BTC ETFs cannot be overstated. Executable Bitcoin ETF applications that rely on BTC futures include those developed by ProShares, Invesco Ltd.

, VanEck, Valkyrie Digital Assets, Galaxy Digital. If one of them or the other is approved, other major asset managers like Fidelity and Vanguard will be encouraged to package their own versions of BTC ETFs and BTC mutual funds. In other words, you will compete for size among asset managers to see what constitutes the largest share of bitcoin inflows for large institutional investors. Similarly, investors can easily invest in Bitcoin or cryptocurrencies through 401k accounts and IRAs without opening a cryptocurrency account. This will enable exchanges like Cboe and Nasdaq.

, and the New York Stock Exchange charges transaction fees for BTC ETFs. The bank does everything possible without being left out. That said, it has a large inventory of tradable assets (in this case bitcoin or bitcoin futures) to support the trading activities of large clients.

But, of course, the blame for this story lies with the SEC and its new president, Gary Gensler. Gary Gensler could quickly disappoint Bitcoin ETF fans by suppressing retail speculation in the currency market under the command of the CFTC. Time tells us what will happen in the end, but there is a lot at stake and it seems the greats are cooking.