Takeaways

  • Bitcoin Cash open interest has risen to $400 Million.
  • A rising open interest indicates increased inflows as well as improved sentiment.
  • The plans for a scaling system called ‘CashTokens,’ has also rekindled interest.

The open interest in futures that track Bitcoin Cash (BCH), tokens, has risen to levels of May 2021 as the Bitcoin offshoot experience a revival in activity and value.

Data shows that BCH’s prices have doubled over the last week. It is now one of the best-performing tokens with a market cap above $1 billion. Bitcoin (BTC), and ether(ETH) both increased by 13% and 8% in the same period.

BCH open-interest, or the number unsettled contracts of futures, jumped to $400 million Monday, up from $75 million just a week earlier. Binance was the main source of trading interest, with traders opening $240 million in BCH long and short positions.

BCH trading interest has risen to levels of 2021. (Coinglass)

Open interest increases either indicate that money is being injected into the market, or that existing participants are increasing allocations. This metric can be used to gauge market sentiment and price trends.

The sudden interest in BCH trading is likely due to two factors: a network upgrade and a prominent exchange listing.

Bitcoin Cash went through a hard fork network in May, which improved security and privacy for the fledgling system. It also introduced plans for CashTokens – a scaling method that would enable developers to create decentralized applications on the Bitcoin Cash Blockchain.

The introduction of smaller transaction sizes, which helps speed up transactions, as well as smart contracts functionality, will enable Bitcoin Cash-based apps to offer recurring payment, derivatives trading and crowdfunding opportunities to Bitcoin Cash users, among others.

According to Santiment, a crypto research firm, BCH is also likely to have benefited from EDX Markets.

The new exchange, backed by the traditional financial heavyweights Fidelity, Charles Schwab, and Citadel Securities opened trading on Tuesday and supports BCH, along with bitcoin (BTC), Ethereum (ETH), and litecoin(LTC).

Santiment reported last week that the sudden price change has caught retail traders’ attention. Social discussions about tokens have reached their highest level in three years, and trading volumes for this year are at a record high.

Parikshit Miishra is the editor.