The volume of Bitcoin smart contracts has skyrocketed, the market is welcoming new winds

The volume of smart contracts and the open interest rates skyrocketed at derivative exchanges after the Bitcoin price hit $ 11,700, indicating increasing participation from institutional investors.

On October 12, when the price of Bitcoin rose above $ 11,700 on Binance, the data showed that trading at derivative exchanges also began to spike.

According to data from Skew, the open interest rates of Bitcoin smart contracts on CME have begun to recover. The term open interest refers to the total number of long and short contracts opened at a given time and it is often used to gauge trading activity in a futures market.

Daily volume on exchanges focused solely on institutions like LMAX Digital and Bakkt is also still high. This shows that the volume of institutional investment is increasing in general following the rather good bull run of BTC.

What's behind the rise?
Over the past two months, three multibillion-dollar corporations have publicly announced significant-scale investments in Bitcoin.

See more about Bitcoin transactions: eth to btc

First, MicroStrategy - a publicly listed US company on Nasdaq - said it has invested $ 425 million in Bitcoin. The company said it will view BTC as its primary reserve asset, essentially a hedge against inflation.

Then it was a payment group of $ 81 billion Square with a $ 50 million investment. Square reportedly invested 1% of its portfolio in BTC, demonstrating strength in long-term growth.

On October 13, Stone Ridge - a $ 10 billion wealth manager - bought 10,000 BTC. The company is currently the third largest corporation in the United States to make a major investment in Bitcoin over the past two months.

After massive investments in Bitcoin from MicroStrategy, Square, and Stone Ridge, institutional demand for Bitcoin has also naturally increased.

Bitcoin future data from Digital Assets Data also shows a significant increase in volume over the past 2 weeks.

It is possible that the open interest rate of CME's Bitcoin smart contract has recovered after a series of old contracts expire monthly in September. Each monthly CME smart contract expires on the last Friday of each month.

But the overall increase in volume on institutional platforms reinforces the notion that institutional demand for Bitcoin is likely to increase.

Transactions on the OTC among whales are also on the rise
Since the beginning of October, researchers at Whalemap have reported that OTC transactions among whales are on the rise.

Whalemap - a platform that tracks whale activity and the trades of high net worth investors - found that direct deals have spiked, especially before and after major announcements. They said:

I was expecting to see if more OTC transactions would be made, and they did. I am increasingly inclined to the idea that you can see these OTC transactions happening on-chain before the big news comes out.

As whale and institutional activities increased, the volume of the spot market as a whole had simultaneously increased. During the uptrend, high spot volume is a very important thing to maintain momentum as it shows a real interest in Bitcoin from retail investors.