Bitrabo Editorial
An analysis reveals that the Bitcoin futures-to-spot trading volume ratio has decreased by 63% since the peak of the last bull market. This shift has implications worth noting.
Observation on Bitcoin Futures Market Activity in the Current Rally
According to Ki Young Ju, the founder and CEO of CryptoQuant, in a recent post, the Bitcoin market seems to be less influenced by futures trading compared to the previous bull run.
The key metric under scrutiny is the “futures-to-spot trading volume ratio,” which tracks the proportion between Bitcoin futures and spot trading volumes.
The trading volume signifies the total cryptocurrency value involved in trading activities across exchanges in the sector.
When the ratio is high, it indicates a dominance of futures trading over spot trading. Conversely, low values suggest spot trading prevailing in the market.
In the chart below, we can observe the trend in the Bitcoin futures-to-spot trading volume ratio over recent years:
The graph depicts a notable surge in the Bitcoin futures-to-spot trading volume ratio during the 2021 bull market. At its peak, the indicator surpassed the 12 mark, signifying that the futures volume exceeded spot trades by over twelve times.
Following the peak, this metric gradually declined but remained at elevated levels throughout the first half of 2022. However, as interest waned towards speculative cryptocurrency activity, the ratio plummeted towards the bear market lows.
Despite experiencing a slight resurgence during the 2023 recovery phase, the ratio has since retreated to relatively lower levels, marking a 63% decrease from the 2021 peak. Futures trading volume remains predominant in the market but to a lesser extent than during the previous bull run, indicating subdued speculative interest in the current rally.
Notably, the increasing spot trading volume is deemed beneficial for the overall market environment as highlighted by the CryptoQuant founder.
Additionally, this cycle introduces a new aspect with the rise of spot exchange-traded funds (ETFs) in Bitcoin trading. Ju highlights in a separate post that these ETFs now contribute to nearly a quarter of the total spot trading volume.
Current BTC Price
Bitcoin has experienced a decline of over 4% in the last 24 hours, bringing its price down to $57,300.