Bitcoin’s futures market is experiencing a shift in trends, with a noticeable decrease in the percentage of futures contracts open interest that are margined in the native coin rather than in USD or a stablecoin. Data from Glassnode reveals a significant drop in the use of Bitcoin as collateral for futures contracts, plummeting from 70% in early 2021 to less than 20% by mid-2024.
This shift indicates a growing preference for more stable forms of collateral, such as USD or stablecoins, over Bitcoin itself. The rationale behind this transition is to reduce the risks associated with the volatility of Bitcoin prices, which can result in increased liquidations during market fluctuations. This move towards stability and risk management demonstrates a maturation of the market, where traders are adopting strategies to navigate volatility effectively.
Furthermore, the response of the futures market to Bitcoin’s price stabilization around $70,000 suggests a changing landscape where open interest is starting to recover. This rebound in open interest, combined with the ongoing trend towards stable collateral, underscores evolving trader behaviors and market dynamics.
