Bitcoin Futures: A Growing Market
Bitcoin futures open interest (OI) has witnessed a significant surge in the past day, with CME Group's OI reaching an impressive 100,000 bitcoin, equivalent to $3.4 billion. This surge is not limited to CME Group alone; platforms like Binance, Deribit, Bitget, and Okx are also experiencing substantial upticks in open interest.
Understanding Bitcoin Futures Open Interest
For those unfamiliar with the term, open interest (OI) in bitcoin futures represents the level of market engagement and the volume of money or contracts actively circulating. In simpler terms, it refers to the total number of unsettled futures contracts that have not yet been cleared through a counter-trade or delivery. Recent data reveals a noteworthy increase in bitcoin futures open interest within a span of just 48 hours.
K33 Research's latest findings highlight CME BTC futures OI surpassing the 100,000 BTC mark, setting a new record. With this leap, CME now commands a 25% market share, narrowing the gap with Binance, the leader in the futures sector, to a mere 4%. On October 23, there was also a significant rise in CME's options volume and open interest related to BTC futures.
Deribit is not far behind, with both its futures and options witnessing substantial growth. The platform's bitcoin options OI soared past the $12 billion mark, while its bitcoin futures OI approached a billion. Open interest provides insights into the overall activity and capital flow in the futures market. An increase in open interest typically signals heightened market enthusiasm, while a decline may indicate waning interest.
As of October 23, Binance reported a staggering $12.08 billion in bitcoin futures open interest. Other significant players in the futures domain include Bitget, Okx, Gate.io, Kucoin, and Bitmex. Dydx and Crypto.com have also witnessed recent spikes in open interest. This newfound interest is largely attributed to the potential approval of a spot bitcoin exchange-traded fund.
The recent legal victory by Grayscale and Blackrock's preparations for an ETF are seen as positive signs for the future of bitcoin futures.
What are your thoughts on the recent surge in bitcoin futures open interest? Feel free to share your opinions and join the discussion in the comments section below.
Frequently Asked Questions
What is a Precious Metal IRA (IRA)?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These rare metals are often called “precious” as they are very difficult to find and highly valuable. These are good investments for your cash and will help you protect yourself from economic instability and inflation.
Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.
You can invest directly in bullion with a precious metal IRA instead of buying shares of stock. This allows you to receive dividends every year.
Precious metal IRAs have no paperwork or annual fees. Instead, you pay a small percentage tax on the gains. Plus, you get free access to your funds whenever you want.
What is the Performance of Gold as an Investment?
The price of gold fluctuates based on supply and demand. It is also affected by interest rates.
Due to limited supplies, gold prices are subject to volatility. In addition, there is a risk associated with owning physical gold because you have to store it somewhere.
Is gold buying a good retirement option?
Buying gold as an investment may not seem very appealing at first glance, but when you consider how much people spend on average on gold per year worldwide, it becomes worth considering.
Physical bullion bars are the most popular way to invest in gold. But there are many other options for investing in gold. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. If you need cash flow from an investment, purchasing gold stocks is a good choice.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs may include stocks that are owned by gold miners or precious metals refining companies as well as commodity trading firms.
How much of your portfolio should be in precious metals?
First, let's define precious metals to answer the question. Precious metals are those elements that have an extremely high value relative to other commodities. They are therefore very attractive for investment and trading. Today, gold is the most commonly traded precious metal.
But, there are other types of precious metals available, including platinum and silver. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It is also unaffected significantly by inflation and Deflation.
The general trend is for precious metals to increase in price with the overall market. However, they may not always move in synchrony with each other. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. Investors expect lower interest rate, making bonds less appealing investments.
When the economy is healthy, however, the opposite effect occurs. Investors prefer safe assets such as Treasury Bonds and demand fewer precious metals. They are more rare, so they become more expensive and less valuable.
Diversifying across precious metals is a great way to maximize your investment returns. Additionally, since the prices of precious metals tend to rise and fall together, it's best to invest in several different types of precious metals rather than just focusing on one type.
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
Investing in gold vs. investing in stocks
It might seem risky to invest in gold as an investment vehicle these days. This is because many people believe gold is no longer financially profitable. This belief arises because most people believe that the global economy is driving down gold prices. They believe they would lose their money if they invested gold. However, investing in gold can still provide significant benefits. Here are some examples.
Gold is one of the oldest forms of currency known to man. There are thousands of records that show gold was used over the years. People around the world have used it as a store of value. Even today, countries such as South Africa continue to rely heavily on it as a form of payment for their citizens.
Consider the price per gram when you decide whether you should invest in or not. The first thing you should do when considering buying gold bullion is to decide how much you will spend per gram. You could contact a local jeweler to find out what their current market rate is.
It's also important to note that, although gold prices are down in recent months, the costs of producing it have risen. The price of gold may have fallen, but the production costs haven’t.
Another thing to remember when thinking about whether or not you should buy gold is the amount of gold you plan on purchasing. It is sensible to avoid buying gold if you are only looking to cover the wedding rings. It is worth considering if you intend to use it for long-term investment. It is possible to make a profit by selling your gold at higher prices than when you purchased it.
We hope you have gained a better understanding about gold as an investment tool. It is important to research all options before you make any decision. Only after doing so can you make an informed decision.
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