Daily Bitcoin On-Chain Snap #14

BTC Futures Premium spikes on CME ahead of ETF Approval, with leverage in spot markets at yearly lows

Funding rates spiked this week as institutional investors bought the rally, with a notable outlier in the ~13% annualized futures premium on the Chicago Mercantile Exchange (CME). This increase reflects the high demand among institutional investors to get long exposure in bitcoin ahead of the anticipated Proshares ETF approval on 18 October. Meanwhile, leverage in the spot market continues to drift lower, curbing volatility in the interim. Note that open interest in crypto-margined products has come down from the highs of 70% in May to a modest 45% in October, signaling less systemic risk in the probability and impact of cascading liquidations. This also aligns with the high-risk period in May when froth was evident at the onchain level by reading that 70% of exchange assets were levered.

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Miners transfer large amounts of BTC to exchanges ahead of anticipated ETF approval on 18 October

As BTC returns to all-time highs, miners have begun transferring large amounts of BTC to exchanges. This can be seen as a take-profit strategy by miners with the anticipated ETF approval on 18 October serving as the near-term catalyst. This remains consistent with the tendency of miners to offload supply near all-time high levels in anticipation of mean-reversion.

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