Arcane, a crypto analytic firm, carried out a survey on crypto derivative trading for 2022. The result of the study showed that BTC futures traders were brewing negative sentiments toward derivative trading in recent months.
BTC Future Basis Dropped To Mid-June Lows
The wall of BTC derivative trading began crumbling since the tragic general crypto market dump occurred in June. Bitcoin price has been struggling since it made an impressive bounce back recently; however, it is back to its lows.
Furthermore, the future basis of BTC, which is the difference in prices between BTC’s futures contract and its spot prices, is current at a very low level. The report shows that it is back at levels it briefly touched when the BTC price dropped to $17k in mid-June.
In the report, Arcane suggested that negative sentiment is brewing strongly among futures traders. Meanwhile, the survey report showed that the CME’s futures performed worse in the past couple of months.
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The contracts currently trade at their lowest spot price, even lower than their 2021 lows. Their prices spiked up at the beginning of August; however, the pump was short-lived as it dropped back to lows.
The analytic firm suggested that the up and down movements of the prices result from the structural effects in the derivatives market. The firm added that the deteriorating liquidity or overall derisking are risky strategies.
Furthermore, Arcane suggested that the general market downturn limits traders’ engagement in the derivative market. It also encourages them to accumulate more assets in their spot market.
GBTC Trades At 30% Low Price
In June, the American regulators refused to allow Grayscale Bitcoin Trust (GBTC) to offer BTC spot price ETF. Consequently, the giant institutional BTC investment firm continues to struggle to stay aloft in the bearish market.
Currently, GBTC’s Bitcoin spot price is sitting at a low level as it trades at 30% below last year’s price. The price reportedly dropped below the 34% level during the extreme market condition in June before it bounced back to 32% and then 30%, where it currently trades.
Jeroen Blokland, a prominent crypto researcher and investor stated that the trend of things in the derivative market seems static. He had initially thought the Bitcoin exchange-traded funds would get approved soon.
But after the latest SEC rulings, he realized the approval was not coming anytime soon. He added that a massive number of institutional investors prefer BTC derivatives to trading GBTC.