CME’s Bitcoin Futures drop premium rates for March 2020 contracts

An influx of institutional investors and the growth of Bitcoin’s derivative market was a major highlight of 2019.

The introduction of Bakkt BTC Futures, Fidelity’s interest in crypto and the launch of the Binance Futures trading platform, all came soon after Bitcoin’s significant rise between April and May. Many considered the development of the derivatives market to be imperative for the next bull run. However, at press time, the market sentiment remained split between institutions.

According to Arcane research, the Chicago Mercantile Exchange’s Futures registered a drop in Futures premium rates for its March 2020 BTC contracts. The Bitcoin contracts for December were settled and the attention had shifted to January and March 2020 BTC Future contracts.

It was also reported that the premium rates on CME for March 2020 contracts recorded a dip of 1.61 percent, after being close to around 2.3 percent just a week back.

On the contrary, other platforms offering BTC Futures contract settlements improved their premium rates by 1.55 percent for the same period in March 2020. The institutions included the likes of Kraken, BitMEX, and Deribit.

CME’s drop in premium rates came on the back of its Commitment of Traders report where the data suggested that the organization has been more bearish than bullish on Bitcoin. According to data shared by Unfolded, traders, hedge funds, and money managers have been net short on Bitcoin since the last week of 2019. The aggregated position of -1,250 BTC was the lowest witnessed over a year.

While the CME’s COT report remained bearish at press time, the total open interest and volumes on CME Bitcoin Futures were significant, as the daily volume crossed the $300 million mark again after last breaching the same position on 23 December.