Bitcoin Premium
Data tracked in the 10x survey showed that annual premiums for rolling futures for three months fell to 4.3%. This is a significant drop from the over 10% high seen earlier this year.
Despite the stable price of BTC above $100,000, the so-called decline in the base indicates optimism or uncertainty of decline regarding future price outlook.
This decline coincides with a slide in permanent futures funding rates listed on major offshore exchanges. According to 10x, funding rates have recently reversed negatively, suggesting lasting future discounts compared to spot prices. This is also a sign of bias in short positions, bearish.
The difference in lower price is a setback for those seeking to pursue non-directional cash and fare arbitration, including purchasing spot ETFs (or actually BTC) at the same time and shorting CME futures.
“When yield spreads fall below the 10% hurdle rate, Bitcoin ETF inflows are usually driven by directional investors rather than arbitrage-focused hedge funds. This dynamic is often in line with price consolidation. Currently, these spreads are 1.0% (permanent futures financing rate) and 4.3% (CME bassity rate). A 10x study told Coindesk.
BTC 3M CME futures based (premium) and permanent funding rate. (10x survey)
Thielen added that the drop-off coincides with muted retail participation, as the declined eternal funding rate and the volume of low-spot markets shows.
Padalan Capital expressed similar opinions in its weekly update, calling the decline in funding rates a sign of a reduced speculative profit.
“The more serious signal of risk-off positioning comes from regulated venues where the CME-to-spot foundations for both Bitcoin and Ethereum have been knocked down into deep, negative territory and show substantial rewinds of aggressive institutional hedges or cash-and-carry structures,” Padaran Capital said.
Read more: XRP Army is truly global as CME data reveals that almost half of XRP futures trading occurs in non-US hours
