Bitcoin has surged over 45% so far this year, outperforming traditional risk assets, including Wall Street's tech-heavy Nasdaq index, by a significant margin. Futures typically trade at a premium in a sign of leverage being skewed on the bullish side when the underlying asset is appreciating in value. Conversely, during bear markets, discounts are often observed.
Another reason the CME has flipped offshore exchanges is that futures-based exchange-traded funds tied to bitcoin invest only in regulated CME futures contracts. According to Arcane Research, open interest, or the number of open futures contracts on the CME, currently sits at 80,586 BTC – or 70% of the global open interest. That's significantly higher than 28% during the height of the bull run in April 2021.
"It is rare to see CME futures trade at a [higher] premium," Lunde said."With that in mind, CME is a huge part of BTC futures activity as a whole. The offshore futures market is insignificantly small now, with all activity concentrated in perpetuals." Looking forward, a continued move higher in the premium may see carry traders return to the market. The cash and carry arbitrage involves buying bitcoin in the spot market and simultaneously selling futures contracts in a bid to pocket the premium. Carry trading
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