Bitcoin futures premium has seen hedge funds employ a cash-and-carry strategy. Ethena's mechanism for maintaining the value of its stablecoin also plays a role in Bitcoin's horizontal trend. Bitcoin's declining exchange reserve is likely flowing into spot Bitcoin ETFs. Bitcoin's price declined by 2.4% on Thursday following a general crypto market slump. However, key insights from derivatives and on-chain data show why BTC has been trading sideways.
Also read:Bitcoin on verge of 20% rally as Fed leaves rates unchanged Another key factor to look into is a similar strategy employed by the DeFi protocol, Ethena, to maintain the price stability of its synthetic USDe stablecoin. Ethena employs a delta-neutral hedging strategy — similar to cash-and-carry, as explained above — where it purchases Bitcoin and Ethereum from the spot market and shorts their equivalent derivative products.
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