Bitcoin futures market leverage declines to 0.24x

Leverage in the Bitcoin futures market has decreased significantly, with the ratio of futures notional value to spot market value dropping to 0.24x, the lowest in two years. Futures notional value represents the total dollar value of open futures positions. A lower ratio indicates a decline in the size of leveraged futures positions. Bitcoin futures open interest has fallen approximately 47% to 55% from its peak, while offshore Bitcoin futures trading activity is down about 97% from the 2021 bull market high. At the Chicago Mercantile Exchange (CME), Bitcoin futures open interest and trading volume have reached their lowest levels in 14 months. Additionally, annualized returns from basis trades, where traders buy spot BTC and sell premium-priced futures, have narrowed to about 3% to 5% from over 20% previously, reducing the benefits of leveraged futures trading compared to earlier periods.

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