Bitcoin Derivatives Market Surges 20% in Open Interest Post US Spot ETFs

Bitcoin's derivatives market has seen a significant surge in open interest, reaching $96.2 billion. This figure, while down from its peak of $114 billion, still represents a substantial increase from 2022 levels. The introduction of US spot Bitcoin ETFs in January 2024 has accelerated this trend, with open interest fluctuations becoming more volatile post-ETF. This heightened speculative activity is reflected in the Realized Cap Leverage Ratio, which stands at 10.2%, indicating that Bitcoin's price action is being driven by leveraged trades.

The elevated speculative leverage in the Bitcoin market fuels bullish breakouts, potentially driving rapid rallies past key resistance levels. However, this same leverage also raises the risk of cascading liquidations, which could trigger sharp price drops similar to the 2021 crash. The market has shown signs of maturity since the 2022 FTX collapse, with stablecoin-margined collateral now dominating over crypto-margined positions. This shift reduces collateral volatility and offers a buffer against market shocks.

Data from CryptoQuant indicates that the BTC-USDT futures leverage ratio is slowly increasing near its peak from early 2025. This confirms the elevated leveraged market concerns, with Bitcoin moving sideways above $100,000 for over a month. Crypto analyst Boris Vest noted that traders are preparing to move in either direction, with short positions continuing to increase on Binance. The ratio between long and short positions is quite balanced, as inferred from the normal funding rates. Vest suggested that within the $100K–$110K range, most traders are leaning toward short positions, increasing the chances of a move in the opposite direction. It’s possible that larger players are quietly accumulating in this zone.