The difference between the futures price and the current market price rose more than 15%.
“Post-election clarity” will spark inflows into bitcoin ETFs, analyst says.
The futures market gave its verdict: bitcoin (BTC) traders anticipate a rally post-US election bullish
The above can be seen in the base of the Chicago Mercantile Exchange (CME) which has risen from 7% yesterday to highs above 15% today. The “basis” refers to the difference between the futures market price and the spot price (current price of the asset) of bitcoin (BTC).
The CME is one of the world’s leading markets where futures contracts are traded.
When the basis of an asset rises, like bitcoin in this case, it means that the futures are trading at a higher price compared to the spot price. This positive difference indicates that the participants in these markets They believe that the price of bitcoin will be higher, rather than lower.
For their part, bitcoin perpetual futures contracts, which were trading at lower prices which in the spot market, now have the highest positive premiums since March, according to a Bloomberg analyst.
A premium is the difference between the price of a perpetual contract (which has no expiration date) and the spot price of bitcoin.
This behavior in the futures markets suggests that, after the elections in the United States in general, and after the victory of Donald Trump, in particular, there is a rebound in market expectations about the medium-long term price of bitcoin.
The shift in expectations towards bullish price predictions can be seen in the recently shared graph: at the end of October, the CME’s “base” was around 14%, and then fell to 6% until November 4. Between November 4 and 6, the CME base rebounded to the aforementioned 16%.
Bitcoin futures markets serve as a powerful predictor of an asset’s price. This is because futures prices reflect traders’ expectations about the subsequent price of an asset (without trading said asset directly).
If many traders believe that the price of an asset will rise, Will they be willing to pay more for futures contracts? which raises the price of these contracts.
According to Vetle Lunde, an analyst at K33 Research, these positive post-election expectations are also spreading among ETF investors. He comments that “strong ETF flows are anticipated today in the context of rising CME premiums (carry opportunities) and post-election clarity, which should support strong performance,” referring to bitcoin.
According to Eric Balchunas, exchange-traded fund analyst, IBIT, the bitcoin ETF created by Blackrock, saw an input volume of 1 billion dollars (“1 “billion” in English) in just twenty minutes. He also ensures that other ETFs that are on the market and issued by different firms have seen similarly crazy volumes.
Balchunas comments: “a day of record volume is expected (and since the price has risen so much, this is likely to fuel frenetic volume versus crisis volume = look for entries this week).”
Quinten, another user of the social network was never revisited subsequently.
In general, then, the market has high expectations and excitement regarding the price of bitcoin. This could be because, during his campaign, Donald Trump promised to make the United States a global center for cryptocurrenciesin addition to creating a strategic reserve of Bitcoin. As CriptoNoticias has detailed, he also made promises to appoint regulators to support digital assets.
None of these promises have gone unnoticed by bitcoin users, in the United States and around the world, which has been reflected in the price of the currency.
