The crypto-market has been noting a lot of momentum lately, especially in light of price volatility making a comeback. With prices heading north, Bitcoin and many of the market’s altcoins have offered great returns for investors. However, while traditionally many have leaned on Bitcoin, traders may now be eyeing altcoins for the long-term over the world’s largest cryptocurrency.
During the period of low volatility, the Bitcoin market was moving sideways whereas small-cap crypto-assets were trading at a higher price. Even as BTC managed to deliver 24% in returns in July among other USDT-Margined contracts, alts like VeChain [VET] and Chainlink [LINK] outperformed every other crypto recording 95% and 70% in gains, respectively, according to Binance’s July trading report.
While VET returned 266% in YTD, LINK was returning 379%. This sudden boost in the price of the two digital assets garnered attention from traders, especially those alt traders who were looking to manage risk and beat the low volatility in the Bitcoin market.
As the spot market rallied, derivatives exchanges were also noting an increase in volume and interest. Binance reported that its Futures volume rose from $87.6 billion to $109.4 billion in July, a 25% surge from the previous month. In fact, it also reported an ATH in volume with over $13 billion traded on 28 July, a day when BTC’s price crossed $11k.
Interestingly, the altcoins dominated the volume in the initial weeks of July as the metric rose from 32% to 60%. This was significantly contributed to by the great volatility in the VeChain, Chainlink, and Cardano market. Later on, as said volatility reached Bitcoin, its volume was observed to have risen from 40% to 60% within a few days.
Interestingly, this increase in the volume of Bitcoin did not correspond with a growing Open Interest in the Futures market. According to data, the total OI was recorded to be $900 million, which was the largest for Binance. However, BTC’s OI was observed trending lower, falling from 67% to 47% in July. Instead, altcoin contracts have been driving most of the growth in Open Interest.
The growing contributions of altcoins to the market’s volumes and Open Interest suggests that traders may be placing their long-term directional bets on altcoins, not Bitcoin.