Bitcoin futures have entered into a contango market, suggesting further agony for the cryptocurrency. A contango market means an asset's futures contracts are trading at a premium to its spot price. For instance, bitcoin on the Coinbase exchange was trading near $7,898 on Wednesday, while Cboe bitcoin futures contracts expiring in June were trading at $7,980 per coin.
Bitcoin itself has dropped significantly from its highs late last year, wallowing below $8,000 per coin following a meteoric rise in 2017; bitcoin continues declining from its March highs of $11,700, most recently testing support at
$7,700. In addition, the most recent blow came from an announcement that
Twitter would ban cryptocurrency ads. We have seen similar bans by Google and Facebook, as regulatory scrutiny has been another negative catalyst for bitcoin this year.
Hence, looking ahead, we’ll see larger bitcoin miners attempt to take advantage of this contango market. Based on the current conditions about bitcoin, FuninUSA analyst Mike Dong holds the view that
the investors should be cautious when considering to invest bitcoin or bitcoin futures, until seeing some signs of strength injected back into the market. (recommend
FuninUSA for more financial news)
What's your opinion on the contango market of bitcoin futures? Would you consider it being beneficial to bitcoin miners?