New Round of Leverage-Adjusted Research Shows Bitcoin Derivatives Market 'Healthier' Than Q1

Bitcoin (BTC) rocked leveraged traders this week in classic style, but new data suggests the market is generally healthier than it was earlier this year.

Data analytics firm Arcane Research highlighted findings in its latest weekly newsletter showing consistency in futures markets for the fourth quarter of 2021.

'Healthier' markets continue to maintain bullish bias

Sentiment began to falter as a sudden correction in BTC’s price caused leveraged long traders the most pain on Wednesday.

This is unwarranted, and the data suggests that the derivatives market is structurally firmer than it was during the initial rally to $64,900 in April.

Arcane focuses on the so-called futures basis — the difference between the spot price of bitcoin and the futures price on different exchanges.

Three-month basis spreads surged between January and April 2021, with Binance and FTX peaking at 46% and 45%, respectively, in April when BTC/USD breached all-time highs.

That compares with a premium of just 12% on CME’s bitcoin futures at the time.

However, not only are the three providers nearly equal now, but the basis is much lower — even as Bitcoin surpasses its April performance.

Currently, Binance, FTX, and CME are trading at premiums of 14%, 13%, and 8%, respectively.

Arcane added in a Twitter comment: “The basis is now much lower than when BTC was trading above $60,000 in April — suggesting a healthier market.”

Days to go until first Bitcoin spot ETF decision

As Cointelegraph reported, the rate of change among institutions in terms of bitcoin exposure is becoming more pronounced.

Gold, which has been flat in price compared to BTC for a long time, is losing money quickly as investors opt for cryptocurrencies.

Grayscale is the operator of the largest Bitcoin fund, the Grayscale Bitcoin Trust (GBTC), which now has more assets under management than the world's largest gold fund.

Exchange-traded funds (ETFs) based on bitcoin futures also set records, while operator Bitwise said this week it would switch its scheme to a spot-based product.

U.S. regulators are due to make a decision on the first spot ETF from VanEck on Nov. 14.