Bitcoin Open Interest Sets New Record High
The aggregate futures open interest of Bitcoin hit a new all-time high on May 20, prompting speculation about whether bearish traders could soon face liquidation.
Despite Bitcoin’s repeated inability to break past the $107,000 level since May 18, the large volume of leveraged positions in the market may be enough to push the asset to fresh highs.
According to data from CoinGlass, total open interest in Bitcoin futures climbed to $72 billion on May 20—an 8% rise from $66.6 billion one week earlier.
Much of this increased leverage is being fueled by institutional participation, with the Chicago Mercantile Exchange (CME) leading the way at $16.9 billion, followed by Binance at $12 billion.
Estimates from CoinGlass show that the heaviest concentration of short positions vulnerable to liquidation is between $107,000 and $108,000, totaling around $1.2 billion.
While the exact trigger for a move above $108,000 remains uncertain, optimism is mounting amid rising concern over the United States’ fiscal position.
There’s still no clarity on how the government plans to stimulate economic growth while curbing spending, particularly given the ongoing divide between Democrats and Republicans.
Compounding the issue, yields on the 20-year U.S. Treasury have risen to nearly 5%, up from 4.82% two weeks ago.
Diminished demand for long-duration government bonds could force the Federal Reserve to re-enter the market as a buyer of last resort, potentially reversing its policy of the last 26 months.
Such action may weaken the U.S. dollar and prompt investors to seek alternative hedges like Bitcoin.
Gold continues to lead as a go-to alternative asset, yet its strong 24% gain year-to-date and $22 trillion market cap may be deterring some investors.
For comparison, the S&P 500 is valued at $53 trillion, and U.S. bank deposits and Treasury bills (M1) total $18.6 trillion.
Bitcoin, by contrast, has a market cap of about $2.1 trillion—roughly equal to that of silver.
Some countries, particularly the United States, have started preparing to shift a portion of their gold reserves into Bitcoin. Such a move could drive prices sharply higher.
A modest reallocation of just 5% from gold to Bitcoin would amount to $105 billion in inflows—equivalent to 1 million BTC at $105,000 per coin.
To put things in perspective, Strategy—the U.S.-listed company led by Michael Saylor—currently holds 576,230 BTC.
Institutional demand continues to be the key driver that could push Bitcoin past the $108,000 mark.
If that level is breached, it could unleash a wave of short liquidations, potentially accelerating the climb to new highs.
Still, broad macroeconomic uncertainty remains a limiting factor on overall sentiment.
As Bitcoin hovers near $107,000, those with short positions are increasingly at risk of forced liquidation—an outcome that could further intensify upward momentum.
Sources:
https://cryptoquant.com/asset/btc/chart/derivatives/open-interest
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