Key Insights:

• The optimistic mood in the Bitcoin market that emerged after Donald Trump’s election has diminished, as shown by the decreasing spread between upcoming and current BTC futures on the CME.
• This indicates a transition away from assuming that a pro-crypto president would positively impact the market, with broader economic factors now influencing trends.
• Despite the futures curve being in contango, the significant recession of the spread reflects reduced bullish expectations.

The shift in market sentiment comes as the spread dropped to $495, down from a peak of $1,705. This downward trend suggests that traders are recalibrating their expectations for future prices. According to Thomas Erdösi, this decline signals a potential moderation in optimistic pricing following the election.

“The narrowing spread between front-month and next-month CME Bitcoin futures could suggest traders are tempering their price expectations,” Erdösi stated.

The easing of the so-called “Trump bump” indicates a shift from previous assumptions, as macroeconomic factors now take precedence. Concurrently, both Bitcoin and indices like Nasdaq have experienced significant declines since February, impacted by various factors including geopolitical tensions and economic outlooks.

Additionally, market reactions were further influenced by Trump’s recent executive order to establish a strategic Bitcoin reserve. Critics noted that the expectations for aggressive Bitcoin purchases were not met, even though it theoretically constitutes a sustainable approach to asset management.

Overall, the dynamics in Bitcoin futures reflect evolving market attitudes, echoing the influence of external economic conditions over political narratives.