Bitcoin futures market deleveraging accelerates

Leverage in the Bitcoin futures market has shrunk sharply, pushing the ratio of futures notional value to spot market value down to 0.24x, the lowest level in two years, Crypto Briefing reported. Futures notional value refers to the total dollar value of open futures positions. A lower ratio relative to spot indicates the relative size of leveraged futures positions has declined from past levels. Crypto Briefing said Bitcoin futures open interest has fallen about 47% to 55% from its peak, while offshore Bitcoin futures trading activity is down about 97% from the 2021 bull-market high. At the Chicago Mercantile Exchange, or CME, which is widely used by institutional investors, Bitcoin futures open interest and trading volume had previously fallen to their lowest levels in 14 months. The outlet added annualized returns from basis trades, in which traders buy spot BTC and sell premium-priced futures to capture the spread, have narrowed to about 3% to 5% from more than 20% in the past. As a result, the benefits of leveraged futures trading have also diminished compared with earlier periods.