Bitcoin CME Futures Premium Drops to Lowest Level Since October 2023, Pointing to Declining Institutional Interest
Bitcoin futures traded on the Chicago Mercantile Exchange (CME) have seen their premium shrink substantially, signaling a decrease in institutional demand, according to 10x Research.
The annualized premium on rolling three-month CME futures currently stands at 4.3%, the lowest since October 2023, down from over 10% earlier this year.
While Bitcoin’s price remains above $100,000, the reduced futures premium—known as the basis—indicates growing uncertainty and less bullishness regarding future price trends.
This decline is consistent with negative funding rates seen recently on major offshore perpetual futures markets, where futures are trading below spot prices, suggesting increased bearish positioning.
Such a drop in premium challenges cash-and-carry arbitrage strategies, which rely on buying Bitcoin or Bitcoin ETFs on the spot market while simultaneously shorting CME futures.
Markus Thielen, founder of 10x Research, explained to CoinDesk that when yield spreads fall under 10%, ETF inflows tend to come from directional investors rather than arbitrage hedge funds, often during periods of price consolidation. Currently, the spreads are 1.0% for perpetual futures funding and 4.3% for CME basis, highlighting decreased hedge fund arbitrage activity.
He also pointed out that retail trading has slowed, as indicated by lower funding rates and subdued spot market volumes.
Padalan Capital’s recent market report supported this outlook, noting the drop in funding rates reflects a reduction in speculative interest.
They also mentioned that the inversion of the CME-to-spot basis for Bitcoin and Ethereum into negative territory signals aggressive institutional hedging or a major unwind of cash-and-carry trades.
