CME Bitcoin Futures Premium Hits Highest Level Since Early January

The latest moves in crypto markets in context for March 24, 2022.

AccessTimeIconMar 24, 2022 at 1:23 p.m. UTC
Updated May 11, 2023 at 5:56 p.m. UTC

Good morning, and welcome to First Mover, our daily newsletter putting the latest moves in crypto markets in context. Sign up here to get it in your inbox each weekday morning.

Here’s what’s happening this morning:

  • Market Moves: Bitcoin's post-Fed rally stalls despite persistent rumors of big BTC purchases by the Luna Foundation Guard. Cardano and dogecoin rally.
  • Featured stories: Bitcoin futures premium on the CME hits highest since early January. Bitcoin-S&P 500 ratio sees a bear flag.

And check out the CoinDesk TV show “First Mover,” hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time.

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Market Moves

By Omkar Godbole

The upward momentum in bitcoin and ether stalled, with ether facing rejection near the $3,100 mark.

Rumors of the Luna Foundation Guard following through on its plans to buy $3 billion worth of bitcoin to introduce a new BTC-backed reserve UST stablecoin continued to make the rounds.

"There's probably $3-$7 billion in bidding coming on the back of @stablekwon's buying of a couple billion. It shouldn't be taken lightly how enormous, known spot buys are," Split Capital's Zaheer Ebtikar tweeted during the Asian trading hours on Thursday.

Bitcoin's implied volatility continued to slide, extending its post-Federal Reserve meeting slide and signaling a persistent bias to sell options (vols). Meanwhile, put-call skews continued to show a preference for puts or options offering downside protection with above-zero prints.

In alternative cryptocurrencies, the meme cryptocurrency dogecoin and Cardano's ADA each surged more than 10%. ADA is being backed by increased accumulation by both small and large addresses. "The addresses by holding indicator show an increasing accumulation across the board in the different brackets. Addresses holding 10-100 and 100k-1m ADA increased their balance by 12% and 11% in 30 days," analytics firm IntoTheBlock said in its Telegram channel.

Attendees of the Avalanche Summit reported an overall positive mood, with a few exciting infrastructure developments in the pipeline. "There is a lot of excitement about NFTs (non-fungible tokens), cross-chain bridges and DeFi (decentralized finance) projects. Institutional investors are well represented. It's common to bump into VCs (venture capitalists) that invested in multiple Ethereum and Solana projects in the past but are new to Avalanche," Ilan Solot, a partner at the Tagus Capital Multi-Strategy Fund, said in an email.

In traditional markets, oil prices rose 5% on both sides of the Atlantic early today after Russian President Vladimir demanded unfriendly nations pay for Russian gas in rubles. "As the EU (European Union) gets around 40% of their gas from Russia, this has huge implications," Marcus Sotiriou, an analyst at U.K-based digital asset broker GlobalBlock, said in an email. "Rising oil prices increase the likelihood of a recession over the coming year."

The futures tied to the S&P 500 pointed to a positive open with a 0.23% gain.

Latest Headlines

CME Bitcoin Futures Premium Hits Highest Since Early January

By Omkar Godbole

The annualized rolling premium in three-month bitcoin futures listed on the Chicago Mercantile Exchange, a proxy for institutional participation, rose to 4.8% early Thursday, hitting its highest level since Jan. 4, according to data provided by Skew.

"This could be caused by bullish institutional investors and the ongoing rolls from the BTC ETFs (exchange-traded funds), which might cause buying pressure farther dated futures," Arcane Research said in a weekly research note published Tuesday.

Bitcoin futures premium on the CME. (Skew.)
Bitcoin futures premium on the CME. (Skew.)

The U.S. Securities and Exchange Commission (SEC) approved ProShares’ Bitcoin Strategy ETF (BITO) and a string of others ETFs investing in the CME-listed bitcoin futures late last year.

The total bitcoin exposure in ProShares ETF trading under the ticker BITO on the New York Stock Exchange rose to a lifetime high above 28,000 BTC on Monday.

Premiums on offshore exchanges have also risen in a sign of improving market sentiment. That said, futures are still drawing less than 10% premium, which indicates that leverage remains low and the recent move higher could be spot-driven.

Analysts remain confident about bitcoin's prospects. "Tens of thousands of bitcoin being bought [by Luna Foundation Guard] and taken off the market will likely have a significant impact on price over the coming weeks/months," GlobalBlock's Sotiriou said. "Bitcoin bears will have a hard time fighting the buy pressure and in my opinion sellers will get exhausted, leading to a move to the upside above $45k, assuming oil prices do not make new highs."

Bear flag on bitcoin-S&P 500 ratio

itcoin-S&P 500 ratio's daily three-day chart. (TradingView)
itcoin-S&P 500 ratio's daily three-day chart. (TradingView)

A potential flag breakdown, a bearish continuation pattern, would imply a resumption of the downtrend from November highs.


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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Bradley Keoun

Bradley Keoun is the managing editor of CoinDesk's Tech & Protocols team. He owns less than $1,000 each of several cryptocurrencies.