Bitcoin open interest hits lows not seen since 2024: Is TradFi abandoning BTC?

Bitcoin’s derivatives market is signaling a significant cooldown as total open interest (OI) across major exchanges has plummeted to levels not seen since early 2024. This sharp decline has sparked an intense debate among market analysts: Is the institutional “TradFi” wave finally receding, or is this merely a healthy deleveraging event?

According to recent data, Bitcoin open interest has experienced a double-digit percentage drop over the past month. This metric, which tracks the total number of outstanding derivative contracts like futures and options, is often used as a gauge for market liquidity and investor appetite. The current dip suggests a massive “flush out” of leveraged positions, particularly following recent price volatility that triggered a series of cascading liquidations.

A key area of concern is the activity on the Chicago Mercantile Exchange (CME), the primary gateway for traditional financial institutions. After months of record-breaking growth fueled by the launch of spot Bitcoin ETFs in the U.S., CME’s open interest has retraced significantly. Some analysts argue that the “basis trade”—a popular institutional strategy involving buying spot BTC and selling futures—is losing its luster as premiums compress and yield opportunities diminish elsewhere.

However, many experts believe the narrative of TradFi “abandoning” Bitcoin is premature. The reduction in open interest may actually signal a shift toward long-term spot holdings rather than speculative leverage. Historically, lower OI often leads to reduced volatility, providing a more stable foundation for the next leg of the market cycle. While the speculative fervor of early 2024 has certainly cooled, the underlying institutional infrastructure remains robust, suggesting that this is a period of market consolidation rather than a full-scale exit.

Source: Bitcoin open interest hits lows not seen since 2024: Is TradFi abandoning BTC?