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Institutions Turning from Bitcoin to Ethereum Futures, JPMorgan Claims

Fredrik Vold
Last updated: | 2 min read
Source: AdobeStock/Wit

Large investors and financial institutions are turning away from bitcoin (BTC) futures and instead focusing their attention on the ethereum (ETH) market, a new note from analysts at investment bank JPMorgan claims.

According to the note, ETH futures are currently drawing more interest, as expectations for the number one cryptocurrency – BTC – have softened, Insider reported.

As evidence of the softening institutional demand for bitcoin, the analysts pointed to bitcoin futures prices on the Chicago Mercantile Exchange (CME) in September, which it said had traded below the spot prices for bitcoin.

“This is a setback for bitcoin and a reflection of weak demand by institutional investors that tend to use regulated CME futures contracts to gain exposure to bitcoin,” the analysts wrote.

Looking at real-world price data for September, however, it is difficult to find any backing for the analyst’s claim that CME’s bitcoin futures have traded at a discount compared to the spot market.

On the contrary, a comparison of the price charts from CME’s bitcoin futures and the spot bitcoin market on crypto exchange Coinbase shows that the futures contracts have often traded at a premium, particularly when prices are rising such as 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 indicate weekends, when CME is closed for trading. Source: TradingView

Similarly, the market for ethereum futures has also traded at a premium to the spot market on Coinbase during periods 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 get exposure to underlying assets, including BTC and ETH.

Comparison between the ethereum spot price on Coinbase (blue line) and the ethereum futures price on CME (orange line) in September. Red areas indicate weekends, when CME is closed for trading. Source: TradingView

At 15:04 UTC, BTC was trading at USD 42,340, having dropped by almost 4% in a day and 11% in a week. At the same time, ETH was changing hands at USD 2,901, after it dropped 7% in 24 hours and 19% in 7 days.

Meanwhile, JPMorgan was also in the news for reasons unrelated to cryptocurrency this week, although still of interest to traders.

According to Reuters, the investment bank has agreed to pay USD 15.7m in cash to settle a class action lawsuit by investors who have accused it of intentionally manipulating the US Treasury futures and options prices by using a technique known as “spoofing.”

In trading, spoofing involves placing orders only to cancel them shortly after, thereby creating the illusion of higher demand or supply of an asset.

The now-settled lawsuit came after what was described as a lengthy US government investigation into illegal trading in both US Treasury and precious metals markets.

JPMorgan did not admit to any wrongdoing in the settlement, which needs to be approved by a federal judge in Manhattan before being considered final, the report said.


Learn more:
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