Abstract
The findings of Wilshire Phoenix indicate that CME Bitcoin Futures contribute more to price discovery than its related spot markets. Our analysis was performed using similar methodology previously employed by the SEC’s Division of Economic and Risk Analysis to evaluate price formation. CME Bitcoin Futures have grown to become significant, this is not only demonstrated through trading volume and open interest, but also by influence on spot price formation. A leading futures market suggests the existence of a robust base of traders who may trade on such market for many reasons such as trust in the exchange venue and lower latency. Studies on price formation between the spot and futures markets in other asset classes often find that the futures markets lead.
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