Record Bitcoin futures driven by institutional and retail interest.
Key Takeaways
- Bitcoin futures open interest reached a record $39.37 billion on July 29, 2024.
- The surge was influenced by the Bitcoin2024 conference and a bullish market sentiment.
Bitcoin climbed to a seven-week high of $69,775 on July 29, coming within 6% of its all-time record as the cryptocurrency’s post-halving rally takes shape 100 days after its latest supply reduction.
The world’s largest crypto by market capitalization has surged over 60% since April 20, when Bitcoin’s per-block mining reward was cut in half to 3.125 BTC. This marks the fourth such “halving” event in Bitcoin’s history, designed to control its supply and increase scarcity over time.
New research from ETC Group indicates the halving’s bullish impact on price typically materializes around 100 days after implementation. Head of Research Andre Dragosch noted on social media that “the halving-induced supply deficit should just start taking effect from now on.”
Dragosch’s analysis of previous halvings in 2012, 2016 and 2020 found that Bitcoin’s mean excess performance becomes statistically significant starting 100 days post-halving. The study showed performance differences increasing substantially and remaining elevated for up to 400 days following each halving.
“The key takeaway is that 100 days after the Halving, the performance difference becomes statistically significant (T-value > 2) and then becomes increasingly significant until around 400 days after the Halving,” Dragosch explained.
Bitcoin’s latest price surge has driven futures open interest to a record $39.37 billion as of July 29, up from $37.49 billion the previous day. CME Group leads with 161,100 BTC in open interest, highlighting strong institutional participation. Major exchanges Binance, Bybit and Bitget have also seen rapid increases in futures activity.
The rally comes amid renewed political focus on cryptocurrencies in the United States. At the recent Bitcoin 2024 conference, presidential candidates and lawmakers discussed establishing a strategic Bitcoin reserve, while former President Donald Trump vowed not to sell government-held Bitcoin if re-elected.
Macroeconomic factors are also boosting sentiment, with inflation moderating and expectations growing for a Federal Reserve interest rate cut in September. The Personal Consumption Expenditures index rose just 0.1% in June, increasing confidence that the Fed may begin easing monetary policy.
Some analysts see potential for further upside, with crypto trader “Titan of Crypto” projecting Bitcoin could reach $110,000 based on technical chart patterns. However, Bitcoin still needs to gain over 5% from current levels to surpass its March 14 record of $73,757.
As the effects of April’s halving continue to play out, the next 300 days could prove crucial in determining whether Bitcoin’s historical post-halving rallies will be repeated. With macroeconomic tailwinds and growing institutional interest, the cryptocurrency appears poised to challenge its previous highs in the coming months.
Earlier this month, open interest in Bitcoin futures hit a record $37.7 billion, buoyed by inflows into spot Bitcoin ETFs, with predictions of Bitcoin reaching $83,000 after breaching the $72,000 mark, conditioned on US economic data impacts.
In January, Bitcoin futures open interest soared to $22.9 billion on centralized exchanges, marking the highest point since November 2021, driven by increased institutional engagement and CME overtaking Binance Futures in activity.
