Contents
Quick Take
- Bitcoin futures contracts are in a contango state, characterized by premiums surpassing $2,000.
- This is seen as a bullish indicator for the price of bitcoin in the first quarter of 2024, according to an analyst.
There is a substantial premium of over $2,000 on bitcoin futures contracts on Binance that are set to expire at the end of March. These conditions indicate the market expects bitcoin’s price to appreciate this spring, according to an analyst.
When futures contracts trade at a higher value than the current spot price, it is termed "contango." This condition indicates that the market anticipates an appreciation in the price of the asset before the expiration date of the futures contract, which, in this case, is March 29.
YouHodler Chief of Markets Ruslan Lienkha described the current contango as "a clear bullish indicator" for bitcoin. He added that institutional investors are hedging the bitcoin price using futures and that they expect further growth after the possible approval of multiple spot bitcoin ETFs. "Institutional investors are accepting the current price for their future bitcoin purchases and are ready to pay more to fixate the current price for future asset purchases," Lienkha told The Block.
Bitcoin annualized daily basis hits all-time high
THE SCOOP
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The heightened premium on bitcoin futures contracts is evident in data from The Block, which also indicates that the market is factoring in an anticipated increase in the price of bitcoin by the end of March.
The difference between the spot price of an asset and the future price of the same asset has increased to an all-time high, according to The Block’s Data Dashboard. Data from Binance Futures contracts with a quarterly expiry date of the end of March show that the bitcoin annualized daily basis is now over 20%. "When the basis is increasing, it suggests that the market expects the spot price to rise," Deribit Chief Commercial Officer Luuk Strijers told The Block.
Over the past 24 hours, bitcoin briefly surged to a year-to-date high of over $45,800, propelled by the increasing anticipation that regulatory approval for U.S.-based spot bitcoin ETFs could be granted soon. The largest digital asset by market cap has since posted a slight retrace to change hands for $45,284 at 10:50 a.m. ET, according to The Block’s Prices Page. Major altcoins such as solana, the native token of the Solana network, and ether also posted daily gains of 4% and 2% respectively.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
TAGS BINANCE BITCOIN CRYPTO MOVERS ETHEREUM SEC SOLANA
About Author
Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].
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