The Chicago Mercantile Exchange Leads Binance in Bitcoin Futures
It is reported that the trading premium of BTC futures on the Chicago Mercantile Exchange (CME) is higher than that of Binance. The data shows that the trading…
It is reported that the trading premium of BTC futures on the Chicago Mercantile Exchange (CME) is higher than that of Binance. The data shows that the trading price of three-month Bitcoin futures listed on CME is about 8.7% higher than the basic reference index. The price premium of the currency security on the exchange has jumped to 6.3%, the highest level since January 2022.
CME Bitcoin futures premium exceeds Binance
Interpretation of the news:
Bitcoin, one of the largest cryptocurrencies, has proven to be a great investment option for many traders. This popularity has led to the creation of Bitcoin futures contracts, allowing people to speculate on its future value without owning the actual asset. The two major exchanges that offer Bitcoin futures are the Chicago Mercantile Exchange (CME) and Binance.
Recently, there has been a significant difference between the trading premium of Bitcoin futures on CME and Binance. According to reports, the three-month Bitcoin futures listed on CME have a trading price about 8.7% higher than the basic reference index. This means that traders are willing to pay a premium to trade Bitcoin futures on CME rather than buying them directly from the market at the reference price.
In comparison, the trading premium of Bitcoin futures on Binance is relatively lower. This difference in trading premium can be due to several reasons.
Firstly, CME has been in the futures market for years and has established itself as a reliable exchange, which attracts traders who value stability and trustworthiness. Binance, on the other hand, is a relatively new player in the futures market, and it is yet to build its reputation to the level of CME.
Secondly, the level of regulation in these exchanges is different. CME is regulated by the Commodity Futures Trading Commission (CFTC), a regulatory body established to protect consumers in the futures market. Binance, however, operates in a regulatory grey area, with no clear guidelines on how to classify cryptocurrencies.
Lastly, the institutional investor demand for Bitcoin futures on different exchanges can also impact the trading premium. Institutional investors, such as hedge funds, are more likely to invest in CME because it is regulated and has been in the futures business longer.
In conclusion, the higher trading premium of Bitcoin futures on CME is a reflection of the exchange’s established reputation, clearer regulatory stance, and demand from institutional investors. Binance, a relatively new player in the futures market, may need to do more to build its reputation and attract institutional investors.
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