How does treasury basis trade affect the value of digital currencies?

1 answers

• Nov 24, 2021 · 3 years ago
  As an expert in the field, I can confirm that treasury basis trade can indeed affect the value of digital currencies. This trading strategy involves buying digital currencies in the spot market and selling equivalent futures contracts. When there is a positive basis, traders can profit from the price convergence between the spot and futures markets. This can lead to increased demand for digital currencies and potentially drive up their value. Conversely, when there is a negative basis, traders may sell digital currencies in the spot market and buy futures contracts, anticipating a price decline. This selling pressure can potentially decrease the value of digital currencies. Therefore, it is important for investors and traders to consider the impact of treasury basis trade when analyzing the value of digital currencies.
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