It’s not just gold that is celebrating the return of the race to the rates bottom which ensures that real rates around the globe are (or will soon be) negative for a long time, with analysts starting to whisper that NIRP may be coming to the US, making inert, zero-yielding assets attractive.
Bitcoin, left for dead as recently as one year ago, has exploded in the past two months, and after trading at $4,000 at the start of April, the cryptocurrency has been soaring and overnight spiked to just shy of $10,000, trading at $9,810 at last check.
Bitcoin’s performance is relatively mild in the context of all cryptos, where one of the smaller crypto peers, Litecoin, has sported an impressive 370% YTD return.
But more important than what has happened is what will happen, and courtesy of our friends at sk3w.co , we find that crypto derivatives markets “are gearing up towards another big weekend as bitcoin approaches $10k.”
More notably, all September futures have already breached $10k on the crypto native platforms.
Open interest for Bitmex’s bitcoin perpetual swap (XBTUSD contract) – the most liquid bitcoin derivatives instrument globally with ADV this month ~ $3bln – is at year highs of $840MM, according to sk3w..
On the institutional side, CME bitcoin futures total open interest also reached an all time high last night with ~ $273mln notional open.
The current session so far has been “surprisingly quiet” as excitement is building in the market – no liquidation > $2.5mln today on Bitmex.
On the options side – vol has been picking up and skew coming off to further negative territories indicating call buying flows
Meanwhile, the options market backed probability of bitcoin > $15k at Sep expiry is currently 14%.
One final observation: Sundays have recently been especially busy recently!