Institutional Interest for Bitcoin Rises, Yet Challenges May Hamper Future Adoption
Institutional interest for Bitcoin and other digital assets has been apparent in previous years. Yet industry experts believe that investors are taking a newfound interest in Bitcoin (BTC) following the approval of 11 US spot Bitcoin exchange-traded funds (ETFs).
David Lawant, Head of Research at FalconX – an institutional crypto brokerage – told Cryptonews that increasing institutional interest for digital assets has become evident based on recent data.
“Since mid-last year, when Blackrock filed for a spot Bitcoin ETF and the approval began to seem like a genuine possibility, the conversation around institutional interest started to shift,” said Lawant. “With the exceptional performance of spot Bitcoin ETFs, it has been further accelerated.”
According to Lawant, one of the best ways to gauge adoption of US-based large institutional investors is by comparing the open interest with the basis – which is the difference between futures and spot prices – at the Chicago Mercantile Exchange (CME).
“For instance, the chart directly below shows futures open interest by exchanges,” said Lawant. “The second chart shows the CME basis for both Bitcoin and Ethereum (ETH).”
Lawant pointed out that both charts reveal unprecedented interest by institutions.
“The CME overtook the first spot in Bitcoin’s future open interest at the end of last year, and it has been gaining further share since then,” he said. “Also, the CME basis remains elevated, especially for Bitcoin futures.”
Matthew Niemerg, Co-Founder of the Layer-1 platform Aleph Zero, told Cryptonews that Microstrategy issuing over $800 million of low-interest senior convertible notes to buy Bitcoin is another example of continued institutional adoption in digital assets.
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