CME Bitcoin Futures Report: $1.6K Premium Signals a Strong Start for 2024

• It is reported that CME’s Bitcoin futures traded at $47k in the early hours of January 2, higher than the spot price.

• According to analysts, this surprise movement only occurred on the Chicago Mercantile Exchange.

2024 started strongly for the futures market as the Chicago Mercantile Exchange Bitcoin (CME) Bitcoin (BTC) futures traded at $47,040 on January 2. This is reported to be higher than the spot price as analysts explore the cause for this price move. Crypto traders have also questioned whether the movement was only limited to CME, and if it has any significance in the future price move.

In an attempt to answer this, some analysts have linked the feat to the market anticipation of the potential approval of the spot Bitcoin Exchange-Traded Fund (ETF). It can be recalled that a senior analyst at Bloomberg, James Seyffart, recently stated that a chance of ETF approval by January 10 has a 90 percent probability.

Okay, we’re nearing in on deadline dates for 3 spot #Bitcoin ETF applications. I want to get ahead of it because there’s a pretty good chance we’ll see delayed orders from the SEC. Delays WOULD NOT change anything about our views & 90% odds for 19b-4 approval by Jan 10, 2024.

Explaining the market behavior, analysts disclosed that a typical healthy market sees monthly futures contracts trading between 5 percent to 10 percent basis rate to account for a longer settlement time. A look at the CME’s Bitcoin futures between January 2023 and November 2023 shows that there was a very low premium relative to the BTC spot market. It has barely exceeded $350, a 14 percent increase annually.

More on the Bitcoin Futures Market

Things changed on Nov. 24, 2023, when the CME Bitcoin futures premium surged to $900. This is the highest recorded in more than two years. 40 days before that, the Bitcoin price had surged by 41 percent to $37,750. The futures premium declined by $530 by December 6, 2023. Bitcoin had risen to $43,800 at that time.

According to a report, the traditional U.S. stock markets opened before this movement. When the 4,180 BTC ($945 million) futures contracts were traded earlier this year, a similar trend did not happen.

$1,600 premium (53% annualized rate) is reported to have dropped $500. Other crypto exchanges including Binance, Bybit, OKX, and Deribit had an annualized 32% BTC futures premium on December 2, 2023. It is reported that this is the highest recorded in two years. This implies that the aggressive buying was only limited to CME. This has been linked to the variations in client profiles with a 40% to 50% margin required by CME. Crypto exchanges are said to offer up to 100x leverage.

BTC options market is also reported to have been neutral in relation to pricing put and call options since December 6, 2023.

As of press time, Bitcoin (BTC) was trading at $43,113.43. In the last three months, the asset has surged by 57%, adding $15,795.33 to its previous price. Bitcoin currently has a bearish sentiment with a score of 32/100. In the past 24 hours, the asset has declined by 3.71%.

A price prediction platform predicts that Bitcoin could rise as high as $120,717.60 before the year ends.

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