Bitcoin Open Interest Collapses to 12%. Is the Short Squeeze Over?

In brief

• Crypto-margined Bitcoin futures now make up about 12% of open interest, down from nearly 100% around 2019–2020.
• Bitcoin rebounded from around $57,000 to a weekly close near $79,175, today up about 1.88%.
• In the past 24 hours, $570.08 million in positions were liquidated, with shorts hit harder than longs.

Bitcoin futures traders have all but abandoned crypto as collateral. The share of Bitcoin open interest that is crypto-margined—positions backed by Bitcoin itself rather than a stablecoin—is now about 12% across all exchanges, according to Glassnode's long-run metric.

That's a long way from where it sat in 2019 and 2020, when crypto-margined contracts made up close to 100% of the market. For most of the last decade, if you opened a BTC futures position, your margin was almost always denominated in BTC.

A crypto-margined position is collateralized in the asset you're trading, so a price drop shrinks your buffer at the exact moment the trade is going against you—a feedback loop that can trigger a margin call just as the market is moving fastest. Stablecoin-margined positions, by contrast, sit in dollars, so the collateral keeps its value while the trade swings.

Traders have simply chosen the steadier float.