Anticipated ETF Approval: BTC Record Over $20B Spike In Open Interest

The latest data from Coinglass reveals a surge in total Bitcoin open interest to about $20.43 billion. This spike comes amid heightened expectations on the US regulator’s decision on some of the spot Bitcoin exchange-traded fund (ETF) applications.

CME Exchange Tops Bitcoin Open Interest Chart

Meanwhile, the Coinglass data further showed that the CME exchange’s contribution to this open interest is the highest at $6.19 billion. Following the CME’s contribution is the world’s largest crypto exchange, Binance, which contributed $4.56 billion.

Bybit is next to Binance with $3.55 billion. Furthermore, BTC’s open interest on exchanges, such as OKX, Bitget, and Deribit, is over $1 billion each. Based on the latest available data, BTC’s open interest on the CME exchange has increased in the last day by over 15%.

Per the same data, the BTC open interest on the CME exchange surged by about 19% this past month. A comprehensive knowledge of Bitcoin’s open interest is critical, as it denotes the overall count of unresolved or open derivative contracts (including futures and options). This indicator also helps in assessing market sentiment and impending price fluctuations.

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Leveraging The Bitcoin ETF Frenzy

Analysts believe that market optimism regarding a spot BTC ETF approval is one reason for BTC’s recent rally. It’s trading at $46,903 with 171% gains in the last 12 months, per the latest CoinMarketCap data.

If the SEC approves these applications this week, it will be historic, being the first spot Bitcoin ETF approved by a US securities regulator. Investing in Bitcoin without owning it could result in billions of USD cash flow into the leading digital asset.

According to recent reports, several potential issuers updated their filings last Friday and would likely get final approval by Wednesday. Recall that the regulator and some of these potential issuers discussed their 19b-4 filings this past week.

Asset Managers’ Pre-ETF Funds Cause Uproar

Meanwhile, Bitwise’s updated report showed that Pantera Capital had invested $200 million in its seed fund, with Bitwise investing $500,000. In addition, BlackRock and Fidelity each announced $10 million and $20 million starting funds for their ETFs.

Their most recent report shows that BlackRock bought 227.9 BTC on January 5. Meanwhile, the massive BTC purchases made by these fund managers show their competitive nature ahead of the US SEC approval.

ETF Fee Structures

The ETF market is very competitive, with each company having varying fee structures. For instance, Ark Invest and 21 Shares cut their fees from 0.8% to 0.25% and offered not to charge any fees for the first six months or until their BTC-managed funds reach $1 billion.

Conversely, BlackRock stated that it would start charging 0.2% in fees for the first year, or until its ETF reaches $5 billion in assets, and then increase its fees to 0.3%. Meanwhile, Bitwise won’t charge any fees for the first six months before it starts charging a 0.24% fee.

The fees for other players, such as Franklin Templeton, Invesco Galaxy, Fidelity, Wisdomtree, Hashdex, and Valkyrie, range between 0.39% and 0.9%. It is worth noting that Grayscale charges the highest fee at 2%. However, it plans to lower it to 1.5% in its amended S-1 filing.

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Each firm’s fee structure shows how it plans to draw investors into a market, becoming more aware of cryptocurrencies as an authentic and appealing asset class. If the top US financial regulator approves the Spot Bitcoin ETF, it could increase institutional buyers’ interest in digital assets, setting the broader crypto market on another bullish run.

Author: Owen Clark

Owen Clark, a seasoned crypto newsman and broker, deciphers the intricacies of the digital currency realm, empowering investors with his astute analysis and actionable insights.

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