1. BTC-margined contracts now make up 33% of the total futures open interest, a significant increase from 20% in July, according to Glassnode data reported by CoinDesk.
2. These contracts offer non-linear payoffs, which means that traders can reach their position-liquidation points faster compared to cash-margined contracts.
3. While Bitcoin's use as margin collateral in futures trading has grown, cash and stablecoin-margined contracts still account for the majority, at 65% of the total open interest.
4. The increased interest in #BTC-margined contracts raises the potential for volatility and liquidation cascades, particularly if these contracts dominate the market.
5. #Liquidity has been leaving the crypto market, with the total market value of stablecoins declining for 17 consecutive #months and the market cap of Tether (USDT), the largest stablecoin, also decreasing in #recent weeks. This trend may be linked to the renewed interest in coin-margined contracts, #suggesting a shortage of cash in the market.