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CME Leveraged Funds Raise Bets Against Bitcoin to Record High as Futures Premium Spikes
Earlier this month, analysts had warned of renewed interest in cash and carry arbitrage.
Updated May 11, 2023, 6:43 p.m. Published Oct 26, 2021, 9:57 p.m.
Leveraged funds on the Chicago Mercantile Exchange (CME) raised their bets against bitcoin rising to a record high in the week ended Oct. 19, possibly to profit from the widening gap between futures and spot markets prices.
The Commodity Futures Trading Commission’s (CFTC) Commitments of Traders report released on Friday showed leveraged funds held a net short position of 31,000 contracts in the seven days to Oct. 19, marking an increase of 6,000 from the previous week.
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Record shorts by leverage funds does not necessarily mean these traders had a bearish bias. They may have raised short positions in the futures market and simultaneously bought the cryptocurrency in the spot market, booking the so-called carry trade.
The strategy is initiated when futures trade at a notable premium to the spot price and trades can profit from an eventual convergence of prices in the two markets.
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The annualized premium in the front-month bitcoin futures contracts surged from 1% to 20% in the run-up to ProShares’ Bitcoin Strategy ETF launch on Oct. 18, and was last seen at 13%. The three-month rolling premium also rose from 3% to 16% before tapering to 11.7%.
ProShares’ ETF, which invests in the CME-listed bitcoin futures contracts, made a strong debut last Tuesday on the New York Stock Exchange, while Valkyrie’s futures-based ETF went live on Friday.
Earlier this month, analysts had warned of an uptick in futures premium and renewed interest in cash and carry arbitrage.
Also read: Bitcoin Futures ETFs May Boost Cash and Carry Yields
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
What to know:
Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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Ce qu'il:
- Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.
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