Bitcoin futures base, defined as the difference between futures and spot price, has risen to levels not seen since BTC reached an all-time high above $68,000 in late 2021.
According to Luuk Strijers, Commercial Director of cryptocurrency exchange Deribit, the floor currently ranges between 18% and 25% annually, and these values were only seen in 2021.
Strijers explained that the high annual basis allows derivatives traders to earn significant returns. This can be achieved by purchasing spot Bitcoin and simultaneously selling nominally equivalent futures contracts at a higher price. This trading strategy provides a dollar gain that can be realized at maturity regardless of Bitcoin's fluctuating value.
The disparity between Bitcoin's spot price and futures price can be considered a reflection of increasing market momentum. This momentum has been building since the approval of ETFs in January and expectations for the impact of Bitcoin's halving event next month.
“The fact that this return is incredibly high is a very bullish indicator and is driven by the daily new money flowing into the system due to the spot Bitcoin ETF approval and the expected impact of the Bitcoin halving,” Strijers said.
Strijers noted that in the Bitcoin options market, the number of outstanding calls increased compared to puts expiring towards the end of March. The overall put-call ratio for Bitcoin is currently 0.59. This shows that there are six puts for every ten buys. However, for June this ratio drops to 0.32, indicating only three puts for every ten buys. According to the analyst, this bullish indicator combined with increasing market momentum reveals a positive outlook for the Bitcoin market.
*This is not investment advice.