Demand for BTC futures soars to $35 billion, but option markets show no signs of excessive optimism.
Bitcoin (BTC) hit an all-time high of $73,650 on March 13, marking a 44% gain in 16 days. The surge reflects the increasing demand for spot Bitcoin exchange-traded funds (ETFs) listed in the U.S., which saw a record $1 billion in net flows on March 12. Traders are questioning whether Bitcoin can reach $80,000, given that professional traders are continuing to add bullish leveraged positions.
Some analysts argue that Bitcoin is being utilized as a hedge against U.S. monetary policy, especially following the 3.2% increase in the Consumer Price Index (CPI) in February compared to the previous year. Consequently, this puts pressure on the U.S. Federal Reserve (Fed) to refrain from cutting interest rates further, adding to the risk of an economic recession as companies have fewer incentives to expand and hire.
Conversely, if the pessimistic scenario materializes, with inflation accelerating and the Fed compelled to raise rates further, this could prove detrimental for risk-on assets, including Bitcoin. During periods of uncertainty, investors tend to seek refuge in short-term U.S. Treasury and cash positions, even if they have strong long-term convictions in the stock market or real estate.
