In an efficient market prices in the futures and spot markets tend to converge. Futures Bitcoin, however, traded at a 10% premium compared to prices on the spot market.
Arbitrage on the difference in price and cross-trades in both markets allow you to profit without any risk. In this case, the arbitrage traders can sell futures for Bitcoin and buy bitcoins on the spot market, making a profit, regardless of how the price of Bitcoin. According to Bloomberg, BCT-futures give you a premium of about 13% since the start of trading on CBOE on Sunday.
Edward Tilly, Chairman and chief Executive officer of CBOE, said:
The arbitration will close this gap, but it will take a few days or even weeks. This will not happen for 12 hours or so. A lot still to learn. This gap will disappear eventually closes.
While the arbitration opens opportunities in a perfect market, the market of BTC is still far from effective. On various cryptocurrency exchanges – different price. Bitcoin trading at a huge premium in Asia and such countries as Zimbabwe. However, traders cannot take advantage of the difference in prices because of government capital controls.
As the price varies considerably on different exchanges, it is important to consider the reference rate used in futures contracts. CBOE futures contracts based on the exchange rate in Gemini, while the CME futures contract based on the index of multiple exchanges. It is expected that the proposed futures contract is the Nasdaq of Bitcoin is based on the price of Bitcoin from more than 50 sources.
The presence of the switches also represents the difference between the spot market and futures market. In the debut of Bitcoin on the CBOE were involved in two switches that led to the suspension of trading in a few minutes. Was the 2-minute timeout during the trading sessions, when the price increased by 10% and the 5-minute – at 20% wage increase. The sharp increase in futures prices in Bitcoin can lead to actuation of the third switch at 30% wage increase.
Further predictions concerning the coexistence of the market for bitcoin futures and spot markets are still vague. Some believe that a new kind of trading will reduce the volatility of Bitcoin.