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SHIB, DOGE Top Open Futures Rankings as Bitcoin Rally Spurs Risk-Taking
SHIB and DOGE have seen highest percentage growth in futures open interest since Nov. 1, outshining bitcoin and ether in a sign of increased investor risk appetite in the crypto market.
Updated Nov 7, 2023, 4:16 p.m. Published Nov 7, 2023, 10:56 a.m.
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Bitcoin's October surge seems to have injected life back into the crypto market, causing an increased inflow of money into leading meme cryptocurrencies shiba inu [SHIB] and dogecoin [DOGE].
Open interest, or the dollar value locked in the number of active perpetual futures and standard futures contracts, tied to SHIB has increased by 23% to $61.74 million since Nov. 1, the highest percentage growth among top cryptocurrencies, according to Velo Data. Open interest in DOGE has increased 14.6% to $328 million.
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Open interest in MATIC, ETH, ETC, and LTC has increased by 6% to 7%, while remaining unchanged in bitcoin [BTC] over the same time period.
An increase in open interest indicates an influx of new capital entering the market. The fact that more money has recently flown into derivatives tied to non-serious coins like DOGE and SHIB suggests increased willingness among investors to take risks. Historically, a continued outperformance of meme cryptocurrencies has signaled greed and marked trend changes in bitcoin's price.
The DOGE and SHIB prices have gained 6.5% and 3.6% in one week, according to CoinDesk data. Bitcoin, meanwhile, has traded flat around $35,000.
Open interest in XRP has increased by a meager 0.76% in seven days, even as the payments-focused cryptocurrency's price has surged by 18.6%, the biggest gain among major cryptocurrencies. The data show XRP's gains have been mainly spot-driven.
Meanwhile, money has been drained from DOT, UNI, TRX, ATOM and BNB.
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What to know:
- Bloomberg Intelligence strategist Mike McGlone warns that collapsing crypto prices and a potential bitcoin slide toward $10,000 could signal mounting financial stress and foreshadow a U.S. recession.
- McGlone argues the post-2008 "buy the dip" era may be ending as crypto weakens, stock market valuations sit near century highs relative to GDP, and equity volatility remains unusually low.
- Market analyst Jason Fernandes counters that a drop to $10,000 bitcoin would likely require a severe systemic shock and recession, calling such an outcome a low-probability tail risk compared with a milder reset or consolidation.
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