Crypto Markets Optimistic Despite Bitcoin's Plunge, CoinDesk 20 Perpetual Futures Show

Crypto traders’ outlook for the broader market remains constructive even though bitcoin (BTC), the leading digital asset by market value, has lost over 10% in market value since the debut of spot ETFs in the U.S. a week ago.

That’s the message from the Bullish exchange’s perpetual futures market tied to the CoinDesk 20 Index (CD20), where funding rates were positive early Thursday. Bullish is the owner of CoinDesk.

Perpetuals are futures with no expiry, with a funding rate mechanism that involves periodic payments between long (buy) and short (sell) traders to ensure the price of perpetual aligns with the underlying index price.

A positive funding rate means perpetual contracts are trading at a premium to the index price, with longs paying funding fees to shorts, signifying bullish market expectations. A negative rate suggests otherwise.

At 06:50 UTC, the funding rate in the USDC-denominated CD20 perpetual futures was 0.0175%, implying leverage is skewed on the bullish side. Crypto exchange Bullish calculates the funding rate every hour, debiting or crediting the amount from users’ accounts according to their positions.

CoinDesk Indices, a subsidiary of CoinDesk, introduced the CoinDesk20 index on Wednesday. The CoinDesk 20 is a broad crypto market benchmark, representing over 90% of the total value. While bitcoin and ether (ETH) account for just over 50% of the index, other tokens like filecoin (FIL), stellar's XLM, aptos' APT, XRP, dogecoin (DOGE), and others make for the rest, making it an S&P 500-like gauge.

Since its inception, Bullish’s CD20 perpetual contracts have registered a trading volume of nearly $18.11 million. (the amount is arrived at by multiplying the 24-hour volume by the index price).

The positive sentiment reflected by the CD20 perpetual futures is consistent with the positioning in perpetual futures for individual cryptocurrencies.

According to Velo Data, the annualized funding rates in perpetual futures tied to the top 25 cryptocurrencies by market cap and traded on major exchanges like Binance have been consistently positive, hovering around 10% to 12% since last Thursday. Binance and several other exchanges collect funding fees every eight hours.

A similar pattern is seen in mid-cap tokens.