Bitcoin Traders Display Caution, Despite the Recent Spot BTC ETF Excitement

A crypto analyst claimed that the spot market is currently dominating as the perpetual futures open interest to market ratio sustains low volume.

Last month, the world's largest asset management firm, BlackRock (BLK), applied to offer spot Bitcoin exchange-traded funds (ETFs).

Notably, this step encouraged many crypto pundits and crypto-friendly firms, as many leading asset managers and investment companies also filed for spot Bitcoin ETFs

Digital Analytics Data Reveals Investors' Interest in BTC

Despite the recent surge in institutional investors' interest in spot Bitcoin ETFs, many traders in the perpetual futures market prefer Bitcoin to remain in risk-free zones. They are unwilling to indulge in high leverage.

According to data from Glassnode and Blockware Solutions, the ratio of open interest in Bitcoin (BTC) perpetual futures to Bitcoin's overall market capitalization has been trapped in a slim range of 1.5% to 1.7% within the past four weeks. This ratio is significantly lower than the peak of 2.6% observed last September.

Analysts at Blockware explained in a Friday newsletter that there had not been any change in futures traders' risk appetites, even despite the world's largest coin trading above the $30,000 mark.

They also noted that the open ratio to market cap is still relatively low. This indicates that the spot market will possibly keep pushing the token's price higher in the short to medium term as supply continues to proceed into the hand of long-term holders, according to the analysts.

Could It Be Possible That Traders Don't Yet Regard Spot Bitcoin Trading?

It is possible that traders don't yet recognize spot Bitcoin as a main innovative solution. It might also imply that they may be concerned about the current painstaking regulatory gray area impacting overall crypto market valuations.

In crypto, perpetual are futures contracts that have no expiration date. Open interest implies the dollar value stored in the number of available contracts.

Leverage enables traders to open positions worth much more than the assets deposited as margin value in an exchange.

By utilizing leverage, traders can increase their profits and loss and expose them to liquidation - which involves the termination of buying or selling positions due to insufficient margin. Therefore, the higher the margin, the higher the probability that liquidations influence market volatility.

Also, an alternative way to measure the use of leverage is to evaluate the ratio of the open interest to the value of Bitcoin (BTC) stored in wallets connected to derivatives exchange wallets.

Moreover, since June 20, the so-called estimated leverage, made popular by the South Korean company CryptoQuant, has remained relatively unchanged, suggesting that most traders are taking it easy.

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