Bitcoin in Action: Micro Futures to Start Trading on CME & Tether Market Cap Up 50% Since First $60k Attempt
The price of Bitcoin is slowly making its way upwards ever since it bottomed out at around $46,000 towards the end of April.
As of writing this, BTC/USD is trading near $58,450. Still, the dominance of Bitcoin has taken a dash and fallen to 47.6%. This primarily due to fresh interest in Ether which for the first time ever has surged to $3,200, up over 330% YTD. ETH -5.26% Ethereum / USD ETHUSD $ 2,968.06
-$156.12-5.26% Volume 19.26 b Change -$156.12 Open $2,968.06 Circulating 117.7 m Market Cap 349.35 b 15 h South Korea’s Largest Crypto Exchange Operator Raises $85 Million at an $8.65 Billion Valuation 15 h DeFi Rallies on China Ban as Chinese Turn to Decentralized Projects, Crypto Prices Recover to Pre-ban Levels 1 d YFI Creator Andre Cronje Launches a Vampire Attack on Popular Ethereum NFT Marketplace OpenSea
But good things could be ahead for Bitcoin now, as well as CME Micro Bitcoin Futures start trading tonight.
I wouldn't be surprised if in the next few years retail CME futures traders largely shift from stock indices to micro bitcoin futures.
— Alex Krüger (@krugermacro) May 3, 2021
At the end of March, CME Group had announced that it is expanding its crypto derivatives with the introduction of new Micro Bitcoin futures, which will be one-tenth the size of one Bitcoin.
With BTC price above $58,500, it has become expensive to own Bitcoin, especially on CME, where one contract involves 5 BTC.
So, these smaller-sized contracts could really attract more investors.
Meanwhile, last week on CME, open interest for Bitcoin trended towards yearly lows with nearly 400 contracts worth oppositions closed.
Leveraged funds experienced the most dramatic change, which is slightly less short than historical extremes but still most short. These traders closed both long and short positions.
Non-reportable traders meanwhile increased both long and short holdings and continue to hover around their historical median. Other Reportable traders who have virtually no short exposure own over 25% of all long contracts outstanding, remaining close to record net-long levels. Although asset managers are net short, they make up a tiny fraction of the overall float.
“These conditions have exhibited a bullish statistical edge historically,” stated Market Science.
— Willy Woo (@woonomic) May 3, 2021
Besides micro futures coming on CME, the USD market cap is up 50% since Bitcoin made its first attempt at $60k. “A lot has gone to alts, but a 50% increase historically only really means one thing for Bitcoin,” said trader FilbFilb.
Tether’s market cap has surpassed $53 billion, which, as Bloomberg puts it, is a sum more than the insured deposits of all but 44 of the thousands of U.S. banks.
“At those offshore exchanges, Tether is the main collateral and margin type,” said Nic Carter, co-founder of Coin Metrics.
“Exchange volumes are way up, and Binance volume is way up. For traders to get access to these crypto-only exchanges, they often prefer a stablecoin like Tether.”
According to CryptoCompare, about 66% of Bitcoin is bought using USDT.
Tether will be releasing the first quarterly statement on its reserves to the New York Attorney general this month as part of the settlement with state regulators. Already, in March, an independent report from an accounting firm confirmed that it is fully backed. Last month, Coinbase also added USDT to its platform.