In May 2025, Bitcoin futures trading dominated the market, with futures desks accounting for 90% of Bitcoin trades, while spot trading activity slowed down. The possible reasons are as follows:
Institutional preference: The increase in institutional investors’ interest in Bitcoin futures is an important factor. Institutional investors tend to use futures for hedging and leverage operations. For example, the total open interest in the Bitcoin futures market has reached 669,090 BTC, an increase of 21% since March 5. The open interest in Bitcoin futures on the Chicago Mercantile Exchange (CME) alone exceeds $13.5 billion, indicating strong institutional demand. Moreover, the continuous inflow of funds into Bitcoin ETFs has also driven the development of the futures market. Investors use futures to match their ETF – related strategies.
Market expectations and sentiment: The market has positive expectations for the future price of Bitcoin. Even after the price of Bitcoin briefly fell below $75,000 in early April, the demand for leveraged positions remained strong. Investors are optimistic about Bitcoin’s rise, so they use futures to obtain greater returns through leverage. In addition, the holding of the Bitcoin 2025 Conference from May 27 to 29 also affects market sentiment. The speech of US Vice – President Vance at the conference, saying that “about 50 million Americans hold Bitcoin and it will soon rise to 100 million”, has further strengthened the positive sentiment in the market.
Macroeconomic and policy factors: The expectation of loose liquidity in the macro – economy has increased the risk appetite of investors, and funds have flowed into high – risk assets such as Bitcoin. At the same time, the legislative progress on stablecoins in the United States and the support policies for Bitcoin reserves in various states have enhanced market confidence. These factors have promoted investors to participate in the Bitcoin market through futures.
The slowdown in spot trading activity may be related to the high price of Bitcoin. After the price of Bitcoin rose to a historical high of $112,509 on May 22, investors may be more cautious in spot trading. In addition, the relatively high transaction costs and relatively low liquidity in the spot market compared with the futures market may also be the reasons for the slowdown in spot trading.
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