Bitcoin futures 1% above market value – Institutional investors remain confident

The „big boys“ continue to rely on Bitcoin, which can be seen from the price difference to the CME futures.

After Tesla boss Elon Musk added the hashtag #Bitcoin to his Twitter status , the price of the market-leading crypto currency has risen significantly.

Bitcoin ( BTC ) seems to have gained a new impetus, especially among professional traders

According to the data from TradingView, the ticker BTC1 !, which shows the Bitcoin Pro futures of the options exchange CME for February, is currently trading at a premium of more than 1% above the actual market value of Bitcoin. Such a positive deviation between the futures price and the spot price of the traded product is called a “ contango „. This shows that the traders are betting on a further price increase, because the price difference actually offers the chance for arbitrage . If the contango nonetheless persists, it becomes clear that sales are not as strong as they are bought.

A deviation of 1% for a futures contract that expires in a month is to be understood as significant, because normally only longer-term futures show such a difference, because the longer the duration of the futures contract, the less attractive it becomes to use it. For comparison: American government bonds only generate 1% return per year (!), Which makes an increase in value of 1% per month all the more lucrative.

When looking at the price chart, it becomes clear that the CME Bitcoin futures are just under 500 US dollars or 1.3% above the „normal“ Bitcoin price

However, it must be noted that TradingView displays the data from the CME with a 10 minute delay, which is why a comparison with the data from Bitstamp must be drawn.

On the influential options exchange CME , only Bitcoin futures are traded at a price of 5 BTC each, which is why they are mostly bought by professional investors. If there is contango on this platform, this is a clear indicator that institutional investors are optimistic about the further price development of the market-leading cryptocurrency.

However, an excessive price difference between the price and futures also indicates that an upward trend is coming to an end, because investors who rely on the corresponding financial product for the long term have probably already bought it. Although institutional investors continue to expect a positive price development for Bitcoin, the jumps are probably not as rapid as they have been in recent weeks.