Bitcoin derivatives markets ‘healthier’ than in Q1, says research after fresh leverage shakeout

A new study on the performance of bitcoin derivatives markets reveals that they are entering a more stable period, after several consecutive months of volatility.

The “crypto derivatives market size” is a statistic that shows the total value of all cryptocurrency derivatives markets. This statistic is used to show how healthy these markets are. The research found that the crypto derivatives market size was healthier in Q2 than it was in Q1.

This week, Bitcoin (BTC) shook out leveraged traders in traditional fashion, but fresh data shows that the market is in better shape than it was earlier in the year.

Arcane Research, a data research organization, highlighted facts from its latest weekly newsletter, demonstrating how aligned futures markets have grown in Q4 2021.

The “healthier” market maintains the bullish tendency.

On Wednesday, a sharp BTC price drop caused the most agony for leveraged long traders, and mood has begun to sway over market strength.

Figures imply that this is unnecessary, since futures markets are fundamentally lot more stable than they were during the first run-up to $64,900 in April.

Arcane concentrated on the so-called futures’ basis, which is the differential between the current price of Bitcoin and the price of Bitcoin futures on multiple exchanges.

The three-month basis saw a strong growth from January to April 2021, peaking at 46 percent and 45 percent for Binance and FTX, respectively, at April’s BTC/USD all-time high.

CME Bitcoin futures, on the other hand, were only trading at a 12% premium at the time.

Even if Bitcoin outperforms April’s performance, not only are all three providers almost equal now, but the base is substantially lower.

Binance, FTX, and CME now have premiums of 14 percent, 13 percent, and 8%, respectively.

In Twitter comments, Arcane noted, “The basis is substantially smaller today than when BTC went over $60k in April – signaling a healthy market.”

3-month basis chart for bitcoin futures. Arcane Research/Twitter is the source of this information.

There are just a few days till the first Bitcoin ETF decision is made.

The rate of change among institutions when it comes to Bitcoin exposure is becoming all the more revealing, as Cointelegraph observed.

As GBTC approaches $40 billion in assets under management, it may become an ETF by July.

Gold, which has had a poor price performance in comparison to BTC for a long time, is fast losing ground as investors flock to the cryptocurrency.

The Grayscale Bitcoin Trust (GBTC), the world’s biggest Bitcoin fund, has now exceeded the assets under management of the world’s largest gold fund.

Bitcoin futures-based exchange-traded funds (ETFs) are also making new highs, while Bitwise, a potential operator, said this week that it will switch to a spot-based product.

On Nov. 14, US regulators are expected to make a verdict on VanEck’s first spot-based ETF.

The “crypto derivatives growth” is a positive sign for the cryptocurrency market.

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