Bitcoin: futures on the rise. ETF approval?


Today Forbes reported that there is a sharp and sudden increase in the money deposited on Bitcoin futures contracts.

The SEC should rule on BTC-based ETFs

The interpretation is that this phenomenon may be linked to the hypothesis of the imminent SEC approval of first BTC ETF.

Forbes’ reasoning is this: if there was a case behind these increases of buy-the-rumor, sell-the-news, the rumor that could have triggered it could be that related to the approval of the ETF.

There are two aspects which suggest this hypothesis.

The first is that in fact it has been known for some time that right in mid-October 2021 the SEC should rule on this. So the news would be about to arrive, both if it were positive, and instead if it was negative.

The second aspect is that several analysts argue that the most recent proposals sent to the SEC, which relate to ETFs based on Bitcoin futures, could be approved.

The SEC should rule on ETFs

Bitcoin and the “buy-the-rumor” principle

Based on these assumptions, a buy-the-rumor phase could be underway which led to a sudden increase in open interest of Bitcoin futures on the CME, as this had increased by 72% as of 12 October compared to six weeks earlier.

Previously these contracts were in the red since mid-February, while now they are in black compared to the beginning of the year.

For the past six weeks the price of BTC has also increased, going from $ 47,000 to $ 57,000, pending the eventual news in mid-October the approval of the first BTC ETF.

Moreover Forbes revealed that only a relatively small number of traders are playing a key role on the demand side for these futures contracts. And this though the identity of these investors is protected by the CME, are suspected to be non-US financial institutions with a deep understanding of the crypto sector.

These are sophisticated companies that can venture into the futures market, and with a lot of capital, given that every single Bitcoin futures contract at CME is worth five BTC, or more than $ 280,000. It also appears that hedge funds have also been providing liquidity in recent weeks.

The identity of these companies will be announced on Sunday 17 October, when the CFTC releases the new COT report. For now, we only know that the increase in open interest on BTC futures has exceeded 2,000 contracts.

In case the news, regarding the decision of the SEC was positive, several analysts say it could have further positive effects on Bitcoin’s price.

What is certain, however, is that now big finance is interested to the evolution of the BTC mass adoption process on the financial markets.


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