How does normal backwardation affect the pricing of cryptocurrencies?

1 answers

• May 07, 2022 · 3 years ago
  Normal backwardation is a concept that can affect the pricing of cryptocurrencies. It occurs when the futures price of a cryptocurrency is lower than its expected spot price. This can happen when there is a positive sentiment in the market and investors believe that the price of the cryptocurrency will increase in the future. As a result, investors are willing to pay a premium for the futures contracts, leading to a lower futures price. This can impact the pricing of cryptocurrencies as it reflects the market's expectation of future price movements. However, it's important to note that normal backwardation is just one factor among many that can influence the pricing of cryptocurrencies.
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