Update: The Bitcoin Futures-Spot arb spread has collapsed to around $600 in the early evening trading (led by Futures selling more than spot buying)...
From a premium of over 13% last night, Futures now trade at just 4.5% above spot as the arb-spread tumbles.
On a side note, we se that the Bitcoin Trust premium to NAV has also collapsed in recent days from over 140% to around 10%...
...Something we would expect to close:...MUCH MORE
“Arbitrage will close that gap, but it will be days and weeks,” Cboe Chief Executive Officer Ed Tilly said on Bloomberg Television Monday, less than a day after launching the product.
“If you’re doing a cash-settled future, it’s just a bet,” said Aaron Brown, a former managing director at quant hedge fund AQR Capital Management who invests in the cryptocurrency and writes for Bloomberg Prophets.
“If that’s not related to any underlying physical transaction, the only people who want to do it are gamblers.”
The wide arb spread is “a big issue. It’s an illiquidity, it has to go away.” The price gap between bitcoin and bitcoin futures won’t last forever, said Dave Weisberger, CEO of CoinRoutes, a cryptocurrency data and order routing company.
“The futures will ping-pong between premium and discount,” he said. “I suspect at some point, potentially triggered by a negative event, it will flip. Markets go up and down, and bitcoin has been no different. It’s just been fast.”...