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Source: AdobeStock / Wit
Large investors and financial institutions are turning away from Bitcoin (BTC) futures and focusing their attention on the Ethereum (ETH) market instead, claims a new note from analysts at investment bank JPMorgan.
According to the note, ETH futures are currently attracting more interest as expectations for the number one cryptocurrency-BTC – have subsided, Insider reported.
As evidence of the declining institutional demand for Bitcoin, analysts pointed to Bitcoin futures prices on the Chicago Mercantile Exchange (CME) in September, trading below the spot prices for Bitcoin.
“This is a setback for Bitcoin and a reflection of weak demand from institutional investors who tend to use regulated CME futures contracts to engage in Bitcoin,” the analysts wrote.
However, looking at the real price data for September, it is difficult to find support for the analyst’s claim that CME’s Bitcoin futures were trading at a discount compared to the spot market.
On the contrary, a comparison of the price charts of CME’s Bitcoin futures and the spot Bitcoin market on the crypto exchange Coinbase shows that futures contracts were often traded at a premium, especially when prices rise as they did earlier this week.
Comparison between the Bitcoin spot price on Coinbase (blue line) and the Bitcoin futures price on CME (orange line) in September. Red areas show weekends when CME is closed for trading. Source: Fujitsu
Similarly, the Ethereum futures market has been trading at a premium to the spot market on Coinbase even in times of rising prices in September. This is in line with normal expectations for futures contracts, which are often a preferred way for financial institutions to engage with underlying assets, including BTC and ETH.
Comparison between Ethereum spot price on Coinbase (blue line) and Ethereum futures price on CME (orange line) in September. Red areas show weekends when CME is closed for trading. Source: Singapore
At 15:04 UTC, BTC was trading at USD 42,340 after falling nearly 4% in one day and 11% in one week. At the same time, ETH changed hands at USD 2,901 after falling 7% in 24 hours and 19% in 7 days.
Meanwhile, JPMorgan was also in the news this week for reasons unrelated to cryptocurrency, although they were still of interest to traders.
According to Reuters, the investment bank has agreed to pay USD in cash to settle a class action lawsuit filed by investors accusing them of deliberately manipulating the U.S. Treasury’s futures and options prices using a technique known as “spoofing.”
In trading, spoofing involves placing orders to cancel them shortly afterwards, creating the illusion of higher demand or supply of an asset.
The lawsuit, which has now been settled, came after a lengthy investigation by the US government into illegal trading on both the US Treasury and precious metals markets.
JPMorgan did not admit wrongdoing in the settlement, which must be approved by a federal judge in Manhattan before it is considered final, the report said.
