Circle CEO Jeremy Allaire said recently that institutional entry is a double-edged sword for the digital currency market, a banquet for dancing with wolves. The reason for this is also related to the hedging method of traditional institutions. When traditional institutions enter a certain market, their strategies will be very diverse. From spot leverage to derivatives futures, long-term operations will be frequently replaced at any time. The goal is also to maximize the benefits.
According to the futures platform BFX.NU, the number of accounts opened in May alone was three times higher than that in April, while the daily trading volume more than doubled from the previous month. The total daily turnover has also exceeded 100 million. Institutional investors are mainly Focus on the two major futures sectors of mainstream currency and stock index.
If traditional institutions look good in the long run, it is not as good as the institutions that have years of market hedging experience, and will not do long-term operations.
The US Commodity Futures Commission (CFTC) recently announced its futures positions as of May 21, and only the Bitcoin futures positions of the Chicago Mercantile Exchange (CME) have reached 4,650 contracts, an increase from the previous month. In 203 lots, the overall business account is short, but the retail position is shown as long. As can be seen from the data, the market for digital asset volatility is not over. Institutional traders continue to hold positions in this area, while also catering to their bearish views, while retail investors are mainly bullish.
Figure: CFTC Commitments of Traders Report – CME (Futures Only)
Under what circumstances can traditional institutions be mostly bearish on Bitcoin? This answer is difficult to have an exact answer in the case of rising prices, but there are still some recent analysis.
Former Morgan Warner trader Tone Vays said at the New York Consensus Conference that he believes Bitcoin will still have a correction, and the callback is expected to range between 33.3% and 40%. If the market wants to enter a healthy bull market, it still needs normal volatility. .
Similarly, some members of the hedge fund BitBull Capital believe that bitcoin will have a high probability of a callback after breaking through $8,000. Even if there is a callback, the possibility of bitcoin breaking through $8,000 again will be high.
It may be that the market's apparent ups and downs volatility, as well as the increase in people's long-term bullish views, institutional investors are very interested in the digital currency futures market, although in the past 2018 bear market, many investors have suffered heavy losses. With the overall improvement of the futures market, new market re-emergence, these positives have restored people's interest in the digital currency field, including the traditional institutions that follow.
The Google Index has also confirmed this view from the side, the market is concerned about the rising mood, perhaps this round of institutional investors to enter the market will continue. (Star Daily)