Bitcoin's popularity is soaring higher than ever as its three-month futures premium reached a whopping 50%, the highest it's been since its inception. This, however, hints at market inefficiencies that can trigger further price volatilities.
BTC struggles to break beyond the $60,000 resistance for a month now. But despite this slightly bearish trend, analysts believe this marks the start of another bullish campaign that can peak in Q4 2021.
Current crypto exchanges trade BTC around $59,000. However, BTC contracts set for maturity this June trades above $65,000, showing a $6,000 price discrepancy.
Futures contracts are expected to trade at premium prices, specifically in neutrally bullish markets. This covers various assets such as equities, currencies, indexes, and equities. But a 50% annualized premium remains a rare sight these days.
These are also unlike perpetual contracts that feature inverse swap capabilities. Instead, these are fixed-calendar futures lacking any fixed funding values.
This creates vast price differences from every regular crypto exchange. Fixed-calendar futures also removes the occurrence of sudden funding rate spikes that on record can reach a massive 43% monthly.
Meanwhile, sellers benefit from this predictable premium thanks to the locked arbitrage strategies for the long term.
Investors gain the upper hand as they experience zero-risk exposure from their futures contract sales thanks to predetermined gains. This is also the reason why futures contract sellers can demand premium profits in bullish markets.
Three-month futures trading hovers around 10% to 20% in regular crypto exchanges. This happens as a justification to lock the funds instead of them being cashed out.
Retail traders are still the number one market to deal with perpetual contracts. This is despite professional traders still preferring fixed-month futures. Furthermore, the former still see a 10% premium expensive even if perpetual contracts cost more in the long run due to their funding rate.
Crypto analysts expect price volatilities to still be the main issue with digital currencies. One main factor to this is crypto-derivatives markets that still aren't regulated by the authorities. Retail traders are also still left with no other option but to leverage their current status.
In light of the growing popularity and speedy adoption of Bitcoin and other cryptos comes the need to learn about the top gainers of the 'crypto revolution.'
FTX Exchange CEO Sam Bankman-Fried currently sits on the top spot as the richest crypto billionaire with a massive $8.7 billion. Coinbase CEO Brian Armstrong takes the second spot with $6.5 billion in total crypto net worth.
Then comes the infamous Winklevoss twins who founded Gemini Exchange. They currently have a collection crypto net worth of $6 billion.
Chris Larsen, the co-founder of Ripple Labs, takes the fourth spot with $3.5 billion. Meanwhile, Michael Saylor, the CEO of Microstrategy, is on the fifth seat with $2.3 billion in crypto assets.