• Bitcoin Cash (BCH) open interest surged to over $400 million as the token’s price doubled in a week.
• Technical improvements and EDX Markets listing likely fueled trading interest in BCH tokens.
• The network upgrade and exchange listing could have helped BCH become one of the top-performing tokens above $1 billion market capitalization.
Bitcoin Cash Sees Largest Bets in 2 Years
Bitcoin Cash (BCH) has seen its open interest surge to May 2021 levels, with traders opening $240 million worth of long and short positions on crypto exchange Binance. This comes as the Bitcoin offshoot network has experienced a revival of activity and value, having doubled in price over the past week and becoming one of the top-performing tokens above a $1 billion market capitalization.
Technical Improvements Fuel Trading Interest
The surge in open interest indicates higher inflows and improved sentiment towards BCH, which could be linked to recent technical improvements implemented by the network. These include plans for scaling system ‘CashTokens’, which allows developers to build decentralized applications directly on the Bitcoin Cash blockchain; smaller transaction sizes; smart contracts functionality; recurring payments; derivatives trading; and crowdfunding opportunities.
Influential Exchange Listing
In addition, renewed interest may have been sparked by influential exchange listings such as EDX Markets , which is backed by major financial companies including Morgan Stanley, Goldman Sachs, JPMorgan Chase & Co., Citigroup Inc., Barclays PLC, UBS AG, Credit Suisse AG, Bank of America Corp., Wells Fargo & Co., Standard Chartered PLC, HSBC Holdings PLC and State Street Corp.
Open Interest Indicator for Market Sentiment
Open interest can be used as an indicator to determine market sentiment and strength behind price trends. Rising open interest either means that new money is flowing into the market or existing participants are increasing their allocations – both good indicators for increased confidence in the asset’s future potential returns.
The combination of technical improvements made to Bitcoin Cash’s infrastructure along with strategic exchange listings make it no surprise that traders have piled back into this asset class en masse – signaling a renewed belief in its potential future prospects.