Research: Only 150K Bitcoin remain in Future OI as switch to risk-off fast approaches

Bitcoin has started 2023 with a steep 15% decline towards a risk-off narrative as metrics show BTC is used less and less as an underlying asset. Bitcoin (BTC) began the year risk-off — as seen in the Futures Open Interest (OI) Crypto-Margined metric displayed below. The decline in BTC Futures OI percentage seen from July 2021 into 2022 portrayed a recovery into a risk-on narrative throughout 2022. However, starting at almost the lowest point in two years, risk is coming off the table fast as we begin 2023. Throughout 2021, over 60% of Futures contracts were using BTC as the underlying asset — lending to the risk-on narrative as BTC is more volatile compared to a stablecoin. Meanwhile, in 2022, crypto-backed margin remained relatively flat in the 35% to 40% range — lower than 2021, but suggestive of stability returning. However, a 15% adjustment to the downside as we begin 2023 indicates that risk is coming off fast into the first quarter.