Bitcoin Futures Surge $1.2B Despite Retail Spending Drop

Bitcoin futures market sees $1.2 billion increase in open interest following FOMC meeting, despite retail investor spending decline.

Bitcoin's futures market experienced a significant surge in open interest (OI) following the Federal Open Market Committee (FOMC) meeting, with over $1.2 billion added in the past 24 hours. This increase, representing an 8% rise, pushed the total open interest to a high of $65 billion on Jan. 30. The aggregated funding rate also rose in tandem with the increasing open interest, indicating a bullish sentiment in the market, with most long positions being opened and prices moving in unison.

However, despite the bullish futures market, retail investor activity at peak prices has been notably different from previous market cycles. Data from Glassnode revealed that Bitcoin retail spend volumes of wallets holding less than 0.1 BTC had dropped by 48% since November 2024. The spending volume peaked in November 2024, with investors spending over $20.6 million per hour, compared to $10.7 million per hour on Jan. 30. Additionally, crypto commentator Quinten Francois mentioned that retail interest in Bitcoin has reached a three-year low, despite the cryptocurrency trading above $100,000.

One particular reason for the decline in retail investment in Bitcoin is the concept of "unit bias." This psychological heuristic in behavioral economics suggests that individuals usually prefer to own a complete unit or stock, regardless of its price and size. With Bitcoin, most investors currently view $100,000 as "too expensive." Sunny Po, an anonymous Bitcoin proponent, explained the mindset of a new investor, stating that "unit bias is a core foundational framework of the normie mind," with the belief that "cheaper is better."

In contrast, Bitcoin's rally in 2024 has been largely led by institutions and the rise of spot BTC ETFs. While retail interest has dropped since November 2024, data from CoinGlass indicated that the total market cap of BTC ETFs increased from $70 billion on Nov. 5 to $125 billion on Jan. 30, representing a 78% rise. A fair assumption is that new investors are possibly favoring exposure through BTC E