Posted 6 months ago | by @devadmin
Institutional bullish bets on Bitcoin (BTC) futures listed on the Chicago Mercantile Exchange (CME) hit a new record level last month amid reports that BTC has hit a 16 month low in volatility.
Bitcoin volatility has fallen to a 16-month low down as much as 57%, signaling that a sharp move in BTC may be in the future for the number one leading cryptocurrency, CoinTelegraph reported.
Currently, Bitcoin (BTC) option open interest has increased to $2 billion, which is 13% below the all-time high. Although the open interest is still heavily concentrated on Deribit exchange, the Chicago Mercantile Exchange (CME) has also reached $300 million according to Trading View. Derivatives contracts allow investors to buy protection, either from the upside (call options) or downside (put options), Coindesk reported.
Lower volatility periods usually signal that substantial price movements are coming, both up and down. Institutional investors are betting on the upside, according to a Commitment of Traders (COT) report published by the U.S. Commodity Futures Trading Commission (CFTC) which stated for the week of Oct. 13th, —institutional investors increased long positions by over 9%. This makes the summation of bullish bets to the record high of 3,500 contracts reached in September.
Bitcoin remained above $10,000 earlier this month despite several bad news items including — the KuCoin exchange hack, U.S. regulators bringing criminal and civil charges against BitMEX, and more recently OKEx CEO arrested with the exchange under investigation.
This comes following Fidelity and JPMorgan both issuing separate reports praising Bitcoin. JPMorgan praised Jack Dorsey for Square’s investment in Bitcoin stating, it’s a “strong vote of confidence” for the cryptocurrency. However, JPMorgan later stated in another report syndicated by Bloomberg that Bitcoin was overvalued by 13% according to its estimates. In that article, JPMorgan strategists including Nikolaos Panigirtzoglou wrote in a note Tuesday about how they determined Bitcoin’s intrinsic value. The group noted, a drop in Bitcoin in September eliminated much “froth” but it remains about 13% higher than an estimate of intrinsic value, they said. JPMorgan strategists stated they found Bitcoin’s intrinsic value by treating Bitcoin as a commodity and looking at the marginal cost of production.
While Fidelity has bet on a “wave” of people investing in Bitcoin. Fidelity also added that Bitcoin could see its market cap surge to $2 trillion if certain conditions are met. As Bitboy Crypto reported earlier this week, the Fidelity report indicated that institutional interest could increase Bitcoin’s market capitalization by up to $1.3 trillion by capturing just 10% of investments from the alternative investments and fixed income market valued at $13.4 trillion.
That’s just one single market the potential redistribution of money could flow into Bitcoin. Fidelity also argues that Bitcoin could capture 1% of the bond market which is approximately worth $50.3 trillion. If Bitcoin were to capture 1% of the bond market that would put Bitcoin up another $500 billion in market cap.
All the stars are aligning so to speak for a massive move for Bitcoin and it seems like it’s more favored towards the upside. Watch Bitboy Crypto’s prediction for when the bull market will start in the video below.
Bitcoin is currently trading at [FIAT: $11,432] UP 0.6% in the last 24 hours according to Coingecko at the time of this report.