Bitcoin Derivatives Market in Q4 Healthier than Q1

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Based on data from Arcane Research, it is known that the Bitcoin derivatives market in the fourth quarter was healthier than the first quarter, following the new leverage data.

Bitcoin previously reached an all-time high of $68,744 but had to be corrected by $7,000, this had shaken trading leverage.

Even so, the data shows structurally, the derivatives market is much more solid than the initial gain to $64,900 in April.

Arcane focuses on the basis of the future, the difference between the spot price of Bitcoin and the futures price on various exchanges.

January to April 2021 saw sharp gains on a three-month basis, these hitting 46% and 45% for Binance and FTX, respectively, at BTC/USD’s all-time highs in April.

In contrast, CME Bitcoin futures traded at just a 12% premium at the time. Currently, Binance, FTX, and CME have premiums of 14%, 13%, and 8%, respectively.

“The bottom is much lower now than when BTC was trading above $60k in April, suggesting a healthier market,” Arcane added in a Twitter comment.

Bitcoin Prices Can Rise, Wait For Spot Bitcoin ETFs

As Cointelegraph reports, the pace of change between institutions in terms of Bitcoin exposure is becoming increasingly apparent. Gold, which has seen a sluggish price performance compared to BTC, quickly lost ground as investors opted for the dominant cryptocurrency.

Grayscale, the operator of the largest Bitcoin fund, Grayscale Bitcoin Trust (GBTC), has now surpassed the largest asset-managed gold fund in the world.

Bitcoin futures-based exchange-traded funds (ETFs) also set records, while aspiring operator Bitwise this week said it would swap its plans for spot-based products.

United States regulators will make a decision on the first spot-based ETF, from VanEck, on November 14.

With this ETF decision, it is predicted that it will push up the price of Bitcoin because with the ETF, Bitcoin exposure will be wider and interest in the king of crypto assets is predicted to increase.

Previously, Bitcoin ETFs were referred to as US cards that could change the market structure,

“This will create as many arbitrage opportunities in the market as there are with CME spreads. Volatility will definitely be boosted and moving forward as any changes will see more capital executed as part of various strategies.”

Says Ben Lilly, market analyst and co-founder of Jarvis Labs.

Because it’s interesting to see how the price of Bitcoin after the spot ETF is launched and the movement of Bitcoin could make the direction of the derivatives market change, will it be better by the end of the year or will it stagnate?