Bitcoin futures premium reaches 20% as price surges to $100,000

Bitcoin (CRYPTO:BTC) has experienced a notable rally, with its price rising 9.4% between December 4 and December 5, reaching an all-time high of over $100,000.

This surge has led to a significant increase in demand for Bitcoin futures, which are currently trading with a 20% annualized premium, a level not seen since March.

The last time Bitcoin futures exhibited such a premium was on March 24, when the price reclaimed the $70,000 mark.

Despite this premium, many traders utilize leverage for short-term trades, and even a 40% annualized premium translates to only a 3.8% cost over 40 days.

Given the optimistic sentiment among cryptocurrency investors, the current basis rate should not raise concerns, especially following Bitcoin's impressive 46% increase over the past month.

Several factors contributed to Bitcoin's recent surge to $103,844, including political developments. 

On December 4, President-elect Donald Trump’s reported selection of Paul Atkins, a known cryptocurrency advocate, to lead the Securities and Exchange Commission boosted trader sentiment.

Additionally, Russian President Vladimir Putin praised Bitcoin's censorship-resistant features as “inevitable,” while U.S. Federal Reserve Chair Jerome Powell acknowledged Bitcoin as a competitor to gold.

The growing market for spot exchange-traded funds (ETFs) linked to Bitcoin is also significant, with a market cap of $107 billion.

Furthermore, MicroStrategy's anticipated inclusion in the Nasdaq-100 index in 2025 could enhance Bitcoin’s price by attracting passive funds that invest in MSTR shares.

In terms of market sentiment, the Bitcoin options market indicates continued confidence in bullish trends. 

Since December 2, open interest in put options at Deribit has lagged behind call options by 48%, suggesting that derivatives markets are not driving the current rally above $100,000.

However, external economic factors remain a concern for investors. 

Brian Leonard, portfolio manager at Keeley Teton, noted that while records are being set in Bitcoin’s price, there is a lack of enthusiasm compared to previous market highs. 

This indicates that Bitcoin's short-term trajectory remains closely linked to traditional financial markets.

At the time of reporting, the Bitcoin price was $97,413.19.