The open interest index in bitcoin futures hit a new record last Thursday, January 14th.

Combined open interest in futures contracts reached $13 billion on Friday, according to data from Skew Analytics, which tracked 12 cryptocurrency exchanges.

The largest bitcoin futures platform is CME, with $2.4 billion, followed by OKEx with $2.2 billion, and Binance with $2 billion.

The remaining trading platforms include Bakkt, Bitfinex, BitMEX, Bybit, CoinFlex, Deribit, FTX, Huobi and Kraken.

Open interest represents the number of contracts awaiting settlement.

The open interest indicator indicates the extent of interest in the market and whether interest has increased or decreased.

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The Skew data platform evaluates the value of the accumulated open interest in dollars, and it is clearly increasing as the above graphs show.

Bitcoin futures contracts allow traders to bet on the future prices of Bitcoin.

Traders enter into a contract to buy or sell bitcoin at a certain price at a certain point in the future.

If the buyer thinks, for example, that the price will rise significantly but can make a deal to buy the currency later at today’s price, and if this happens he will be happy about it and may be the opposite.

Spot trading is different from forward and futures trading, where in spot trading a trader can bet on the rise in the price of bitcoin and decide to buy bitcoin now, or sell it when speculating that the currency will go down.

In futures it’s a little different.

As there is no need to hold bitcoin, most futures contracts are settled for cash by valuing the currency at a certain point in time.

An example can be given by expecting the bitcoin to reach the level of 50 thousand dollars in March 2021. There, a future contract can be opened to buy bitcoin in March at today’s price. If the contract is settled and the trader’s expectation is fulfilled, he is at a profit, but if the value decreases, the trader loses and buys bitcoin more than its price.

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On December 15, the total open interest figure for futures contracts was $7.5 billion across all 12 trading platforms shown above.

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At that point, CME’s trading volume was $1.1 billion, compared to $2.4 billion in the last few hours.

stated Mr. Thomas Kohn, Macro Analyst at Quantum Economics:

The presence of high synthetic interest and leverage fundamentally changes the structure of the market.

The market will become more volatile with more stops and make new trading strategies viable as most retail punters follow long or short momentum strategies.

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