CME Bitcoin Futures: The Key to Bitcoin's Price Discovery, Says Bitwise

Learn about the significant role of CME Bitcoin Futures in Bitcoin's price discovery and its implications for market surveillance. Stay informed with daily crypto updates.

Posted 8 months ago in Bitcoin


An image depicting graphs and charts showing the relationship between CME Bitcoin Futures and Bitcoin price discovery.

Bitwise has filed an amendment to its Bitcoin spot ETF application, arguing that CME Bitcoin Futures play a significant role in Bitcoin's price discovery. The firm claims that the futures market leads the spot market in price discovery, making it a suitable market for surveillance purposes. This comes as nearly a dozen firms, including Bitwise, have been consistently denied the ability to launch a Bitcoin spot ETF by the SEC. The SEC argues that the CME Bitcoin Futures market is not large or related enough to counteract potential manipulation. However, Bitwise cites studies showing that trading volume within the spot market may be mostly fake, making the futures market more relevant. According to a previous study, CME futures accounted for a significant percentage of Bitcoin's price discovery in 2021.

If the SEC appeals the court ruling of its lawsuit with Grayscale, solid arguments regarding the relationship between CME futures and spot prices will be crucial. Bitwise's amendment aims to provide new research and evidence on this matter.

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Last updated 9/25/2023, 10:16:50 PM

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