Major Investors Dump Bitcoin Futures and Switch to Ethereum Futures, Says JPMorgan

According to JPMorgan Chase, the largest US bank, institutional investors are moving from bitcoin (BTC) futures to ethereum (ETH) futures.

Analysts at the US bank say there is now more demand for ether than BTC among the largest investors. This is according to a letter from the bank addressed to its customers in the hands of Business Insider:

Futures are a type of forward contracts through which investors agree to buy a specific asset on a specific date at a pre-agreed price. It is a way of betting on a price rise or fall and provide liquidity.

JPMorgan analysts report that bitcoin futures on the Chicago Mercantile Exchange (CME) will trade at a discount to the spot price in September. JPMorgan calls it a “setback” for the mother of all cryptocurrencies and a sign of a “weak” demand:

“This is a setback for Bitcoin and a reflection of weak demand from institutional investors who tend to use regulated CME futures contracts to gain exposure to Bitcoin.”

In contrast, ether futures increased in popularity in September. When the demand for these types of investment products is high, they usually trade at a premium price relative to the spot market price. According to CME data, the 21-day average premium price on ETH futures has risen to 1% above the spot market.

“This points to much healthier demand for ethereum relative to bitcoin by institutional investors.”

According to JPMorgan. The futures market is currently seeing much higher volumes than the spot market. According to Coingecko data, the daily volume of the spot market on Binance currently stands at about $24 billion, while the derivatives market is a whopping $65 billion. Futures are the most popular derivatives.

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In related news, JPMorgan has been ordered to pay a $16 million fine for “spoofing,” manipulating futures prices. The American bank had to pay a fine of $920 million for this last year. Brazilian authorities have also launched an investigation into JPMorgan over money laundering and oil drum bribery.

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