Bitcoin CME Futures Open at a $1,000 Premium

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Traders on the world’s biggest exchange seem to be just as bullish as the rest with bitcoin’s futures price opening at a $1,000 premium yesterday over spot price.

That has somewhat reduced today to just a $500 premium for the 30 days futures contracts, but the other three longer contracts – closing in February, March and June – are still at a $1,000 premium.

CME’s current bitcoin futures price.

Bitcoin had a jittery reaction when futures opened, diving by around $2,000 to a low of $18,100 before somewhat recovering today to $19,000

That’s on somewhat unchanged volumes at around $13 billion, with Bitfinex handling much of it at $1.2 billion, twice South Korea’s Bithumb of $600 million.

Bitcoin’s price action on the day CME futures opened.

The price reaction was quite in contrast to last week’s historic CBOE bitcoin futures opening. Then, price spiked, rising from $14,000 to almost $20,000.

This time, despite CME’s seemingly bullish bitcoin futures, price turned downwards and remains lower than yesterday.

A potential reason might be that big $20,000, which bitcoin nearly touched yesterday. As a significant psychological barrier, a push-back was perhaps to be expected, with traders seemingly testing support.

If there is another leg up, we might see some sideways action beforehand, with price consolidating before tackling the big $20k.

But of course, price is unpredictable as the future is unknow, so we’ll have to wait and see what it actually does do.

Yet what is known is that bitcoin has now moved into the legacy financial system, becoming yet another asset among many for funds to be invested.

And as the two exchanges are regulated, they may address some of SEC’s concerns highlighted during the rejection of the bitcoin ETF earlier this year.

With other digital currencies, like ethereum and perhaps even bitcoin cash, potentially following in the footsteps of bitcoin, so opening this space to institutional investors and Wall Street.

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