Report: CME Bitcoin futures contract premium declines as institutional investors close positions

According to a recent report from Arcane Research, the monthly premiums of the Chicago Mercantile Exchange (CME) Bitcoin futures contracts are declining relative to the weekly average. CME futures contracts that expired at the end of March rose only 0.6%, while unregulated exchanges had a premium of 1.19%. The June 2020 contract premiums of CME and other exchanges fell to 2.71% and 3.29%, respectively.


It is worth noting that the premium on quarterly contracts has fallen significantly. The report states that just two weeks ago, the premium rate for the March contract was as high as the premium rate for the June contract today. The report lists that the average premium rate since October 2019 is above 10%. As the price of Bitcoin has been falling since reaching a high of $ 10,300 in early February, these premiums have also fallen. Since the high point of February 14th, the annual premium rate that originally reached 25% has gradually decreased, and this downward trend is the same whether it is on regulated or unregulated exchanges. Because the current market is likely to consolidate in the range of around $ 8,600, the premium rate of the March 2020 contract will reach 7%, which is lower than the above average. Institutional investors in the CME performed "not so optimistically", which was reflected in a significant reduction in their open positions on the exchange. Over the past two weeks, more than 37% of open positions on the exchange have been closed. Prices are not expected to rebound in the short term, and this trend is likely to continue.