Bitcoin leads cryptocurrency back above $3 trillion as risky bets grow

By Suvashree Ghosh and Sidhartha Shukla

Digital assets have reclaimed $3 trillion in market value for the first time since January after Bitcoin’s stunning rally, but traders are also piling into leveraged bets in perpetual futures, increasing the risk of rapid price swings.

The market has added more than $740 billion in value since the US Treasury’s announcement last month that it would increase buybacks of long-dated bonds, according to CoinGecko data. Leverage is building alongside the gains. Open interest in perpetual futures across tokens has climbed to nearly $160 billion, the highest since late October last year, Coinglass data show. 

“If open interest and funding keep accelerating faster than spot demand, the risk of a leverage-driven pullback increases,” said Ryan Lee, chief analyst at Bitget. “Macro has not stopped mattering; for now, Bitcoin-specific demand has been strong enough to outweigh those pressures.”

More than $920 million in bearish bets were liquidated on Monday as prices surged. A continued unwinding of short positions could fuel a squeeze, as traders rush to buy back assets to close losing bets, adding further upward pressure on prices. Yet open interest continued to rise, suggesting new leveraged positions are entering the market even as shorts are forced out.