Bitcoin CME Front-Month Futures Reach Deepest Discount Ever Recorded

It’s a new record for the CME. The Chicago Mercantile Exchange’s front-month contracts exhibit a large discount compared to bitcoin’s spot market price. These are the futures contracts that are soon to expire. The CME’s quarterly contracts tend to trade at a minimum premium, and this kind of discount for front-month contracts is not usual. They’ve been trading at a discount for a couple of months, but they reclaimed a premium with the market recovery at the beginning of August. As we all know, that didn’t last. Related Reading: Why Has Bitcoin Futures Open Interest Flatlined? Factors The CME futures contracts on bitcoin have been available since December 2017. The CME’s front-month contracts haven’t traded this low since July 21st of 2021, more than a year and a half ago. At that time, a hardcore short squeeze followed the phenomena. The liquidation amounted to more than $750 million worth of shorts, “leading the open interest denominated in bitcoin to fall by 47,000 BTC,” Arcane Research tweeted. A couple of interesting charts from this week:$757 million worth of shorts was liquidated yesterday, leading the open interest denominated in bitcoin to fall by 47,000 BTC. Sources: @bybt_com, @skewdotcom, and @tradingview pic.twitter.com/XGcpO4jmSq — Arcane Research (@ArcaneResearch) July 27, 2021 In the most recent “The Weekly Update” report, Arcane Research tackled the CME futures situation: “The futures basis on CME’s...