Research: Only 150K Bitcoin remain in Future OI as switch to risk-off fast approaches Research: Only 150K Bitcoin remain in Future OI as switch to risk-off fast approaches
Bitcoin has started 2023 with a steep 15% decline towards a risk-off narrative as metrics show BTC is used less and less as an underlying asset.
2 min read
Updated: Jan. 3, 2023 at 10:46 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin (BTC)ย began the year risk-off โ as seen in the Futures Open Interest (OI) Crypto-Margined metric displayed below.
The decline in BTC Futures OI percentage seen from July 2021 into 2022 portrayed a recovery into a risk-on narrative throughout 2022. However, starting at almost the lowest point in two years, risk is coming off the table fast as we begin 2023.
Throughout 2021, over 60% of Futures contracts were using BTC as the underlying asset โ lending to the risk-on narrative as BTC is more volatile compared to a stablecoin.
Meanwhile, in 2022, crypto-backed margin remained relatively flat in the 35% to 40% range โ lower than 2021, but suggestive of stability returning. However, a 15% adjustment to the downside as we begin 2023 indicates that risk is coming off fast into the first quarter.
Crypto-backed margin also fell similarly on four previous occasions:
- In May 2021 following the China ban on crypto
- Between November and December 2021 just after the all-time high (ATH)
- In April 2022 around the Luna collapse
- In October 2022 with the lead up to the FTX collapse entering a rocky Q4 from a macro standpoint.
![Bitcoin: Futures Open INterest crypto-Margined [BTC] - Source: Glassnode.com](https://cryptoslate.com/wp-content/uploads/2023/01/crypto-margin.png)
Approximately 150,000 BTC remains in Futures OI โ its lowest levels since April 2022 โ as the risk-off trend decline continues to emerge.
To further reveal the distinct switch away from BTC to risk-off and cash, the ‘Cash-Margined’ metric shows a constant incline since April 2021 to a current level of 327,000 BTC โ backed by cash as the underlying asset.
![Bitcoin: Futures Open Interest Cash-Margined [BTC] - Source: Glassnode](https://cryptoslate.com/wp-content/uploads/2023/01/glassnode-studio_bitcoin-futures-open-interest-cash-margined-btc-all-exchanges.png)
Author 
Josh O'Sullivan
Josh has been writing for a decade and is passionate about mainstream crypto adoption, bringing positive financial change to the masses through crypto and decentralized finance as a whole.
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