CME Bitcoin futures trade at a discount, but is that a good or a bad thing? By Cointelegraph
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CME Bitcoin futures trade at a discount, but is that a good or a bad thing? CME Group’s (NASDAQ:) (BTC) futures have been trading below Bitcoin’s spot price on regular exchanges since Nov. 9, a situation that is technically referred to as backwardation. While it does point to a bearish market structure, there are multiple factors that can cause momentary distortions.
Typically, these CME fixed-month contracts trade at a slight premium, indicating that sellers are requesting more money to withhold settlement for longer. As a result, futures should trade at a 0.5%-to-2% premium in healthy markets, a situation known as contango.
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CME Bitcoin futures trade at a discount, but is that a good or a bad thing? CME Group’s (NASDAQ:) (BTC) futures have been trading below Bitcoin’s spot price on regular exchanges since Nov. 9, a situation that is technically referred to as backwardation. While it does point to a bearish market structure, there are multiple factors that can cause momentary distortions.
Typically, these CME fixed-month contracts trade at a slight premium, indicating that sellers are requesting more money to withhold settlement for longer. As a result, futures should trade at a 0.5%-to-2% premium in healthy markets, a situation known as contango.
Continue Reading on Coin Telegraph
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