14 Dec 2021

CME futures traded below spot last night

As market uncertainty brews, the futures basis saw further downward pressure over the last week.
Source: Skew
Accompanied by bitcoin’s poor performance lately, the bitcoin futures market has seen declining futures’ basis across the board.The offshore derivative exchanges trades at a premium to CME, with the annualized offshore futures basis currently trailing between 7-9% with FTX trading at a slight premium. CME, on the other hand, has seen a strong headwind in the last week. This night, CME briefly traded below the spot markets, with institutional traders currently seeming cautious. In the last week, the BITO ETF has also experienced slight outflows, leading the fund to sell futures contracts, leading to further selling pressure on CME. This week’s most important event is the FOMC-meeting. Inflation has been running high in the U.S., and the market anticipates a hawkish FED and accelerated tapering to react to the high CPI numbers. The low basis on CME reflects that institutional traders are likely rebalancing their portfolios, anticipating further headwinds in the markets in the near future.
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