How BTC CME Trade Strategy Influences Market Fluctuations

user avatar

by Giorgi Kostiuk

2 years ago

The recent downturn in the cryptocurrency market has sparked various discussions about its causes. Increased ETF outflows and rapid BTC losses stand out as key issues.

Analysis of BTC CME Trade Strategy

Demand consistently rises during bull markets, leading to positive premiums in CME futures contracts. Previously observed in the GBTC sector, recent events have disrupted this winning strategy.

Bitcoin Basis Trade Strategy

This strategy involves earning profits from the discrepancy between Bitcoin's futures and spot prices. The key idea is that futures prices, such as three-month contracts on CME, must align with spot prices at expiration.

Current Market Conditions

During periods of high demand, basis yield surged into double-digit territories. However, the yield recently dropped to 4% on February 24, making the strategy less profitable compared to safer investment alternatives.

Initially, hedge funds locked in positive premiums for guaranteed profits. As returns decreased, interest in the strategy diminished, prompting sales in both spot and ETF markets.

Tier I

Sector: #18291

Sealed Hiding Place Room

Resource Cache

Resource Cache

Tier I

Requires 25% Tier Progress to Claim
Meme Cache

Meme Cache

Tier I

Requires 50% Tier Progress to Claim
Equipment Cache

Equipment Cache

Tier I

Requires 75% Tier Progress to Claim

After collecting, hiding places will be stored in your inventory and can be opened with Keys.

Other news

Fold Focuses on Customer Retention with New Products

Fold focuses on customer retention and balances with new products like Fold Reserve and Lead Bank spending accounts.

user avatarNguyen Van Long

Onramp Introduces New Business Bitcoin Account with Enhanced Security Features

Onramp has launched a new business Bitcoin account focusing on security and governance, supporting up to three named users and role-based permissions.

user avatarKofi Adjeman

Fold Reports $42 Million Revenue and $26 Million Net Loss in Q3

Fold reported $42 million in revenue and a $26 million net loss for Q3, attributing growth to Bitcoin gift card sales via TikTok Shop.

user avatarSatoshi Nakamura

Hyperscale Data Shifts Focus to Mining and Infrastructure Development

Hyperscale Data plans to generate future Bitcoin balances primarily from mining while targeting infrastructure development.

user avatarJesper Sørensen

Hyperscale Data Completes Sale of Remaining Bitcoin Reserves

Hyperscale Data has sold its remaining Bitcoin reserves, raising approximately $16 million for debt reduction and its Michigan AI campus.

user avatarRajesh Kumar

Coalition of Major Players Opposes Illinois Digital Asset Tax

A broad coalition, including the US Justice Department and major crypto firms, challenges Illinois' Digital Asset Tax Act, arguing it is punitive and discriminatory.

user avatarLucas Weissmann

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.