Asylum sentiment warmed, institutional investors poured into the currency futures market

Asylum sentiment warmed, institutional investors poured into the currency futures market

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)

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

Is Bitcoin really important? In fact, the key is here.

The word bubble is always accompanied by the bitcoin track. When Bitcoin is one dollar, there are economists who have...

Blockchain

Venezuela wants to cast oil coins to 1 million young people, which is good for Bitcoin.

The Venezuelan government will not let its petropolis dreams burst. Despite being besieged, Venezuelan President Nico...

Blockchain

Grayscale GBTC fund premium suggests institutional investors hoarded bitcoin in February

Source / LongHash In 2020, the price of bitcoin will rise from $ 6855 to $ 10,550, a 57% increase. A well-known "...

Blockchain

A-share rat opened 3,000 shares in the year, and Bitcoin hit a 90-day high. Buy shares or buy coins?

On February 3, A shares ushered in the first trading day after the Lunar New Year. Affected by the new crown pneumoni...

Blockchain

Japanese retail giant Rakuten announces allowing users to use points for bitcoin, etc., boosting cryptocurrency adoption

Japanese retail giant Rakuten now allows its customers to convert their Rakuten Group loyalty points into mainstream ...

Policy

Breaking News: Valkyrie Files Updated Bitcoin ETF with the SEC

Valkyrie Investments, a digital asset management company, has joined the trend of modifying Bitcoin ETF filings with ...