Record Bitcoin Open Interest Hits $80B—A Double-Edged Sword for Markets

Bitcoin futures open interest (OI) has skyrocketed to an unprecedented $80 billion, highlighting a surge in leveraged trading as speculators bet on further price gains.

According to CoinGlass, OI has climbed 30% in May alone, underscoring heightened market activity. However, this surge also raises risks—high OI often means traders are overleveraged, borrowing heavily to amplify positions.

If Bitcoin’s price dips sharply, forced liquidations could trigger cascading sell-offs and extreme volatility.

On the other hand, substantial inflows into spot Bitcoin ETFs (over $2.5B this week) may help absorb some selling pressure, acting as a buffer against excessive derivative market swings. The interplay between leveraged futures and ETF demand will be critical in determining whether BTC’s rally sustains or faces a sharp correction.