CME Bitcoin Futures See Record Discount Amid ‘Very Bearish Sentiment’
Bitcoin (BTC) futures are beginning to see record discounts as sentiment among derivatives traders worsens.
In its latest dedicated report released on August 23, research firm Arcane Research painted a worrying picture of the morale among BTC futures participants.
Futures basis revisits June lows
After an initial shock during June’s BTC price drop, which has since held as a macro bottom, Bitcoin derivatives have not been the same.
After an initial rebound, the metrics are trending down, and this month is challenging records.
The futures basis – the difference between futures contract prices and the Bitcoin spot price – is already back at lows only seen since June’s fall to $17,600. The move came thanks to last week’s sudden sell-off in BTC/USD, which resulted in several visits below the $21,000 mark .
“Overall, the current futures fundamentals are at levels only briefly experienced during the June crash,” Arcane confirmed, adding that the data is “indicative of very bearish sentiment among futures traders.”
More discouraging figures come from the CME Group futures contract price for the first month.
Beating previous lows from July 2021, these contracts are now trading at their biggest ever discount to the spot price.
“Overall, CME futures have tended to trade at a discount over the past two months, but saw a solid short-term recovery in early August strength in the market,” the report continued.
Arcane argued that “structural effects” in the derivatives market could explain the behavior to some extent, but that “deterioration of liquidity or general de-risking” remained a risk.
“While BTC derivatives may signal a climate ripe for a short squeeze, the choppy trading range coupled with global market turmoil argues for conservative positioning and gradual accumulation in the spot market,” it concluded.
GBTC hangs near record lows
After US regulators rejected the application for a Bitcoin spot price exchange-traded fund (ETF) in June, the largest institutional Bitcoin investment vehicle continues to struggle.
Related: Aussie asset manager to offer crypto ETF using unique license variation
Grayscale Bitcoin Trust (GBTC) is still trading at more than a 30% discount to the Bitcoin spot price.
The latest data, as Cointelegraph previously reported, puts the GBTC discount – once a premium – at 32.5%. The discount also reached a record high in June, when it briefly exceeded 34%.
For investor and researcher Jeroen Blokland, signs of a trend change are still elusive.
“I expect ‘physical’ bitcoin ETFs to be approved at some point. After the recent SEC ruling, it doesn’t seem imminent, but futures ETFs (also) have their threats,” argued this week.
Blokland said institutional investors were “massively” choosing BTC exposure options other than GBTC.
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