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A Shift in Futures Margin, Low Demand for Puts, RAI’s Rise

Aug 4, 2021 · 4 min read

By Ashwath Balakrishnan, Jayden Andrew, and Jeremy Ong

Market Update

BTC opened the Asia session with a fair bit of selling, but this reversed fairly quickly as demand showed up at the beginning of the European session. BTC has been cooling off over the last few days after a strong rally into the range high, and the rest of the market is pretty much just following BTC.

Stablecoins Becoming Margin Asset of Choice

A big change is coming about in BTC market structure. In the past two years, futures have become an influential force on BTC’s price discovery. The vast majority of futures open interest was margined by actual BTC as collateral. But as FTX, Binance, and other popular venues started to accept stablecoins as collateral, there’s been a surge of traders migrating from coin margined positions (BTC) to cash margined positions (stablecoins). The shift became even more visible in recent months as cash margined open interest soared in the aftermath of the May crash. At the same time, coin margined open

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