The Federal Reserve is likely to lower interest rates, which could enhance the appeal of basis trading for Bitcoin (BTC). An expected reduction from the current range of 4.25%-4.50% to a lower rate might invigorate the market.
Bitcoin’s futures open interest has fallen substantially this year, declining from over 212,000 BTC to approximately 130,000 BTC. The annualized basis return has remained under 10%, significantly lower compared to the previous year.
If rates are cut, it could spur demand for riskier assets like Bitcoin, potentially boosting futures premium and encouraging traders to engage in basis trades as market conditions improve.
Leave a Reply