Wall Street Bitcoin Futures at a $500 Premium, Why?

Bitcoin is trading $500 above spot price at CME for the December futures contract, with a premium found for every month.

Even for August, bitcoin is more expensive on CME than on spot exchanges by about $100. While for September and October it’s at around $300, with December having the biggest premium.

Why there is this premium is not too clear, with arbitrage here not quite possible because these are not bitcoin settled futures.

In fact they have almost nothing to do with bitcoin save for people bet what its price will be at the end of the month or at Christmas.

Thus it is possible for bitcoin’s price and CME’s futures price to diverge and in theory they could diverge completely because there is no “real” anchor to reality.

Were these bitcoin settled futures, then there would have been an easier way to arbitrage, but as they are fiat settled, we get this divergence.

A divergence that may well tell us Wall Street is more bullish on bitcoin than other traders.

Since futures price is quite a bit higher in December, then presumably Wall Street clearly think bitcoin’s price will be higher in December.

At that point there would be just 5 months to the halvening, with all that Brexit mess to go through in between and potentially maybe an even bigger mess in Italy where Salvini most probably thinks nationalists have peaked, so he is seemingly rushing to go to the polls.

Apparently Italians have lost fully their head and find some 36% of their fellow men and women would vote for someone who was very much on the fringe.

Di Maio said he would not enter into a coalition prior to winning the election, but he did and maybe now finds himself outmaneuvered by the fox.

Then there’s Hong Kong, diving CNY, financial crisis in now Argentina, Iranian sanctions circumvention, an apparent endless money printing in Venezuela, and on and on as donkeys keep donkying our economies.

In the circumstances it is perhaps no surprise that what may well be more informed traders are a bit more bullish, but whether bitcoin will take that $12,000 and move on, remains to be seen.