Bitcoin Margin Funding Rate Jumps Amid Latest Price Spike – Can New Investor Influx Keep Pumping BTC?
Bitcoin funding rates on margin positions jumped to their highest levels in over two weeks in the past two days, according to data from the OKX and dYdX cryptocurrency exchanges and presented by crypto analytics website coinglass.com. Positive funding rates suggest that speculators are bullish and suggest that long traders are paying funding to short traders.
The spike in Bitcoin funding rates comes in wake of the cryptocurrency’s latest price jump, which saw it print fresh eight-month highs at $25,270 on Thursday having been as low as the $21,300s earlier this week. Bitcoin has since pulled back to the upper $23,000s, but is still up over 8.5% this week. The price jump of the last few days has also resulted in a spike in liquidations of Bitcoin future short-positions, according to coinglass.com.
The recent jump in price and the subsequent spike in the margin funding rate come against the backdrop of a continued surge of new Bitcoin investors. At least, that is the conclusion that can be drawn from analyzing trends in the distribution of BTC ownership amongst wallets, with the number of wallets with a small BTC balance (presumably retail investors) expanding at a rapid clip.
According to crypto data analytics platform Glassnode, the number of Bitcoin wallet addresses holding a non-zero balance recently surged above 44 million for the first time. This growth has unsurprisingly been driven by a surge in the number of wallets holding a small BTC balance. So-called “plankton” addresses with under 0.01 BTC recently hit all-time highs above 32.6 million.
The number of so-called “shrimp” addresses, defined as holding under 1 BTC, also recently hit a new all-time high above 43.2 million. This suggests an influx of new investors,
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