company-logoresearch-logo
09 Aug 2022

Stable futures premiums in bitcoin while the Merge sends ETH futures into discounts to spot

Futures premiums in bitcoin saw a decline over the last week as bitcoin ranged but stays higher than July levels. Meanwhile, we note all-time low ETH futures prices compared to spot as delta neutral strategies ahead of the merge see growing traction.
Derivates (8).svg
Bitcoin futures
Futures premiums saw a decline over the last week as bitcoin ranged but stays higher than July levels. The futures premiums have declined below 3% in the bitcoin futures market after touching 2-month highs last week of 5%. Still, the current 3-month basis remains higher than what we’ve seen since contagion created havoc in the market in June.
Picture5
Preview
Source: Skew
There are no noteworthy deviations in the premiums of offshore exchanges and CME. While FTX saw the highest premiums last week, FTX futures have since flipped to trade below the rest of the market. CME’s relatively high basis might be helped by outflows from the short bitcoin ETF BITI. BITI’s short exposure currently sits at a BTC equivalent of 2490 BTC, the lowest BITI exposure since June 28th, suggesting an improving sentiment overall in the market. The current decline in futures premiums might be caused by more conservative positioning ahead of Wednesday's U.S. CPI release, which might impact the overall risk sentiment in the coming month. While Bitcoin futures trade above the mid-June to late July levels, Ethereum futures currently trade at an all-time high discount.
Bitcoin perps: Funding rates still tumbling below neutral levels
Funding rates have trailed below neutral territory as BTC has spent most of the week ranging between $23,000-$24,000.
Picture6
Preview
Source: Skew
We noted neutral funding rates amid BTC’s push last week, but following a rather uneventful week in BTC, perps have again resumed trailing below the spot market.It’s now more than 8 months since Binance and Bybit saw funding rates above the neutral level. As perps continue to see funding rates below neutral levels, open interest has seen further growth. Mid-day Monday saw BTC denominated open interest in perps push towards yet another all-time high of 369,000 BTC driven by a sharp growth on Binance.
Ethereum
Ether futures are trading at all-time lows relative to the spot market, while open interest see substantial growth. We further expand on the emerging trading strategies in Ether that causes these dynamics in the article "ETHPoW and ETH2: The story of miners vs. social consensus and trading opportunities".
Picture3
Preview
Source: Skew
Picture4
Preview
Source: Skew
Share this article