CME Bitcoin futures trade at a discount, but is that a good or a bad thing?
1 min read
The Chicago Mercantile Exchange (CME) Bitcoin (
Traders often use open interest as an indicator to confirm trends or, at least, institutional investors’ appetite. For instance, a rising number of outstanding futures contracts is usually interpreted as new money coming into the market, irrespective of the bias.
Although this data can’t be deemed bullish on a standalone basis, it does signal that professional investors’ interest in Bitcoin is not going away.
As further proof, notice that the open interest chart above shows that savvy investors did not reduce their positions using Bitcoin derivatives, regardless of what critics have said about cryptocurrencies.
Considering the uncertainty surrounding cryptocurrency markets, traders shouldn’t assume that a 1.5% discount on CME futures denotes long-term bearishness.
There’s undoubtedly a demand for shorts, but the lack of appetite from market makers is the primary factor leading to the current distortion.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
