Bitcoin Is Grabbing Investor Attention As Gold’s Draw Declines

Bitcoin Is Grabbing Investor Attention As Gold’s Draw Declines
Andrew Rummer

almost 3 years ago1 min

Trading in bitcoin futures has surged this year, even as interest in gold has declined – suggesting the decade-old cryptocurrency is stealing at least a little investor attention away from one of the oldest forms of money.

As the chart above from Finbold shows, the open interest on bitcoin futures – a measure of the outstanding value of futures contracts that’s closely correlated with trading volume – has climbed by 134% since January, albeit from a low base. The comparable figure for gold futures, meanwhile, has dropped by 18%.

To be fair, bitcoin has roughly doubled in price this year while gold has dropped 10%, accounting for a large chunk of this trend: as an asset grows in value, investors will req uire an increasingly large volume of futures contracts to hedge against unexpected price moves.

But this data still suggests a growing acceptance of bitcoin’s role as a mainstream financial asset rather than a fringe hobby. The open interest on bitcoin futures would still need to quadruple to overtake gold’s open interest, but that would truly be a momentous milestone for the upstart asset.

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