Hedge funds attempt to profit from BTC basis trade spreads, CME basis currently close to 18%

Odaily News Bitcoin has risen about 25% since Trump won the U.S. presidential election last week, approaching the $90,000 mark on Tuesday amid friendlier cryptocurrency policies, which has pushed the spread between Bitcoin futures and spot prices to its highest level since March. Hedge funds have long tried to profit from this spread, known as the "basis trade," in which they buy Bitcoin in the spot market and sell forward futures to lock in the difference between the two prices. In doing so, the frenzy could further push up prices in the futures market. According to CF Benchmarks, CME's basis is currently close to 18%, and the basis of the nearest contract of Bitcoin futures listed on the exchange exceeds the basis of other derivatives platforms. "Institutions may now seek to arbitrage the spread between futures and spot prices," said Thomas Erdösi, head of product at CF benchmark. (bnnbloomberg)