Bitcoin CME Futures Premium Drops to Lowest Since October 2023
The premium in bitcoin (BTC) futures on the Chicago Mercantile Exchange (CME) has significantly decreased, indicating lower institutional interest.
- The annualized premium for rolling three-month futures is now 4.3%, the lowest since October 2023, down from over 10% earlier this year.
- This decline suggests reduced optimism about future BTC prices, despite the cryptocurrency remaining above $100,000.
- Funding rates in perpetual futures have also turned negative, indicating a bearish sentiment among traders.
- The narrowing price differential affects non-directional cash-and-carry arbitrage strategies involving spot ETFs and CME futures.
- Current spread rates are at 1.0% for perpetual futures funding and 4.3% for CME basis, highlighting a drop in hedge fund arbitrage activity.
- Muted retail participation is reflected in low spot market volumes and depressed funding rates.
- Padalan Capital reported an inversion into negative territory of the CME-to-spot basis for both Bitcoin and Ethereum, suggesting aggressive institutional hedging or unwinding of cash-and-carry structures.
