Bullish Bitcoin (BTC) positions using leverage on the Bitfinex exchange surged to their highest level in nearly six months, reaching 80,333 BTC on March 20—equivalent to $6.92 billion. The 27.5% increase in Bitcoin margin longs since Feb. 20 has fueled speculation that the 12.5% BTC price gain from the $76,700 low on March 11 is driven by leverage and may not be sustainable.

Bitfinex BTC margin longs, BTC. Source: TradingView / Cointelegraph

However, Bitcoin’s price does not always move in tandem with bullish leveraged positions on Bitfinex. For example, in the three weeks ending July 12, 2024, large investors added 13,620 BTC in margin longs, yet Bitcoin’s price fell from $65,500 to $58,000. Similarly, a two-week-long increase of 8,990 BTC in margin longs took place leading into Sept. 11, 2024, and this coincided with a price decline from $60,000.

Bitcoin margin traders are highly profitable but also risk-tolerant

In the long term, these savvy investors have timed the market well, as Bitcoin’s price eventually surpassed $88,000 in November 2024, while margin long positions were reduced by 30% by year-end. Essentially, these traders are highly profitable but exhibit a much higher risk tolerance and patience than the average investor. Therefore, an increase in leverage demand does not necessarily translate into upward pressure on Bitcoin’s price.

Additionally, the cost of borrowing Bitcoin remains relatively low, creating opportunities for market-neutral arbitrage as traders capitalize on cheap interest rates. Currently, borrowing BTC for 60 days on Bitfinex carries an annualized cost of 3.14%, while the funding rate for Bitcoin perpetual futures stands at 4.5%. In theory, traders can exploit this spread through ‘cash and carry’ arbitrage, profiting without direct exposure to price fluctuations.

Even if one assumes that most of the $1.48 billion in margin longs are not arbitrage trades—meaning these large investors are genuinely betting on Bitcoin’s price appreciation—other exchanges may have offset part of this move. For instance, demand for Bitcoin margin longs has declined significantly on OKX over the same 30-day period.

Bitcoin margin long-to-short ratio at OKX. Source: OKX

The Bitcoin long-to-short margin ratio on OKX currently shows longs outweighing shorts by a factor of 15, the lowest level in over three months. Historically, excessive confidence has driven this ratio above 40, most recently in late February when Bitcoin’s price surged past $105,000. Conversely, a ratio below 5 typically signals a strong bearish sentiment.

Bitcoin options price balances risks of upside and downside fluctuations in BTC price

To rule out external factors limited to margin markets, one should also analyze Bitcoin options. If traders anticipate a correction, demand for put (sell) options will rise, pushing the 25% delta skew above 6%. Conversely, during bullish periods, this metric typically falls below -6%.

Bitcoin 30-day options delta skew (put-call). Source: Laevitas.ch

Between March 10 and March 18, the Bitcoin options market showed signs of bearish sentiment but has since shifted to a neutral stance. This suggests that whales and market makers are pricing similar risks for both upward and downward price movements. Given the margin market trends on OKX and the current pricing of BTC options, a Bitcoin bull run is far from a consensus expectation.

Bitcoin’s lack of bullish momentum can partly be attributed to the higher inflation outlook and weaker economic growth projections presented by the US Federal Reserve on March 19. Concerns over a potential recession, exacerbated by a global tariff war, have made investors more risk-averse. As a result, even though whales are increasing their exposure through Bitcoin margin longs, overall market sentiment remains subdued.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin (BTC) volatility climbed to 3.6% on March 19 — the highest point since August 2024, according to data from CoinGlass.

The volatility reflects heightened market uncertainty amid structural unknowns in the US economy, according to Uldis Tearudklans, chief revenue officer at UK-based cryptocurrency exchange Paybis.

“The policy landscape is becoming more complex with the emergence of Elon Musk’s Department of Government Efficiency,” Tearudklans said. “While the initiative to reduce government spending has bipartisan backing, the broader economic effects — particularly on employment and consumer demand — remain difficult to quantify.”

The Department of Government Efficiency claims to have generated an estimated savings of $115 billion for the US government as of March 19. The alleged savings include workforce reductions, asset sales, grant cancellations, and regulatory savings.

Bitcoin volatility history from March 2013 to March 2025. Source: CoinGlass

According to Tearudklans, if fiscal tightening proceeds alongside stable or gradually declining interest rates, the resulting liquidity contraction “could create a mismatch in policy direction, limiting the intended stimulative effect of future rate cuts.”

On March 19, the Federal Open Market Committee announced that it would leave interest rates unchanged for the time being, although it left open the possibility for two more rate cuts in 2025.

Related: $77K likely the Bitcoin bottom as QT is ‘effectively dead’ — Analysts

Bitcoin volatility on display since Trump’s inauguration

Bitcoin’s volatility is well-known and has been on full display since US President Donald Trump was inaugurated in January 2025.

Since reaching a high of $109,590 on Jan. 20, BTC price suffered a 30% retracement to a low of $77,041 during the week of March 9-15. Selling pressure has increased as more short-term buyers currently find themselves down on their investments, though demand may be slightly returning. The cryptocurrency price bounced up to around $84,000 at this time of writing.

Tearudklans told Cointelegraph that the elevated volatility indicates that traders are pricing in divergent outcomes, including the possibility of fiscal contraction alongside stable or easing interest rates.

“This creates a complex feedback loop where reduced government spending could limit growth, potentially forcing the Fed to maintain a cautious stance or even delay future rate cuts.”

Bitcoin’s price action may also be tied to policy misalignment, he added. “While the Fed’s rate decision offers short-term clarity, the broader fiscal outlook introduces the risk of asymmetric market responses, reinforcing Bitcoin’s sensitivity to macroeconomic cycles and liquidity shifts.”

The volatility of Bitcoin comes as President Trump has expressed overtures to the crypto community. On March 7, he signed an executive order to create a strategic Bitcoin reserve and digital asset stockpile in the United States. On March 20, he spoke at the 2025 Digital Asset Summit, claiming the US will be a “Bitcoin superpower.”

However, Trump’s talk of tariffs and rising geopolitical tension are affecting the financial markets as a whole, including crypto.

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The Depository Trust & Clearing Corporation (DTCC) — the US’s primary clearinghouse for securities transactions — has committed to promoting Ethereum’s ERC-3643 standard for permissioned securities tokens, according to a March 20 announcement. 

DTCC is joining the ERC3643 Association, a nonprofit dedicated to catalyzing the standard’s adoption with the goal of “promoting and advancing the ERC3643 token standard,” it said.

The endorsement highlights how US regulators are embracing tokenization after President Donald Trump vowed to make America the “world’s crypto capital.” 

It also suggests that the Ethereum blockchain network may play an important role in the US’s permissioned security token ecosystem. 

“DTCC will help lead the future of tokenization and support institutional adoption at scale,” Dennis O’Connell, president of the ERC3643 Association, said in a statement.

ERC-3643 is a standard for permissioned Ethereum tokens. Source: ERC3643.org

Related: Tokenization can transform US markets if Trump clears the way

Early mover

The DTCC is a private organization closely overseen by the US Securities and Exchange Commission (SEC). It settles most US securities transactions.

In 2023, the DTCC processed transactions worth an aggregate of $3 quadrillion, according to its annual report. 

Also known as the T-REX Protocol, ERC-3643 is “an open-source suite of smart contracts that enables the issuance, management, and transfer of permissioned tokens […] even on permissionless blockchains,” according to the ERC3643 Association’s website. 

It relies on a custom-built decentralized identity protocol to ensure that only users meeting pre-specified conditions can become tokenholders. 

The DTCC has been an early mover among US financial overseers in embracing blockchain technology, piloting several initiatives related to onchain securities transactions. They include testing settling tokenized US Treasury Bills on the Canton Network and piloting private asset tokenization on an Avalanche (AVAX) subnet. 

In February, the clearinghouse launched ComposerX, a platform designed to streamline token creation and settlement for regulated US financial institutions.

In November, the Commodity Future Trading Commission (CFTC) — a top US financial regulator — tipped plans to explore similar technologies for onchain settlement in the derivatives markets.

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