Bitcoin Futures Demand Increases as Bulls Return to the Market

Along with the rest of the crypto world, the Bitcoin community suffered throughout 2022, and many wondered when the bulls would return. In the past two weeks, however, there have been indications that Bitcoin's reputation as a high-risk asset may have diminished somewhat. Not least because the banking industry itself is beginning to appear risky.

Bring the bulls in

In the past week, Bitcoin's price has increased by 15%, representing a fairly impressive increase. The total market capitalization of the crypto space has also increased by 8%, and is now a staggering $1.125tn. Bitcoin appears to be experiencing a particularly bullish phase. BTC, which had struggled to overcome resistance at the $25,000 threshold since it fell below it in June of last year, smashed through it over the weekend to a price of $27,7k at the time of writing.

Interest in Bitcoin futures has also increased, with the amount of USD locked increasing by 7% over the past month to a new yearly high of approximately $12bn. The current Bitcoin market sentiment appears to be significantly more optimistic than it was at the beginning of last year.

Financial crisis

Uncertainty surrounding banking institutions is a significant factor in the recent surge in Bitcoin's popularity. In the span of just a few weeks, a number of crypto-friendly banks, including Silvergate, went bankrupt, Silicon Valley Bank collapsed in the second largest bank failure in US history, and Credit Suisse was forced to seek emergency funding from UBS.

Due to this crisis, Bitcoin's self-custody and decentralisation principles make BTC appear to be a safe bet for investors amid market uncertainty. Amid heightened regulatory scrutiny, stablecoins are also beginning to appear unsure. As a more stable alternative, this may also be contributing to increased inflows into the largest cryptocurrency by market capitalization.