Wall Street Liquidity Radar: U.S. bitcoin discount persists at 0.137%

U.S. bitcoin buying sentiment remains weak, while trading through an institutional-only venue increased.

Bitcoin was trading at a discount in the U.S. market. Institutional activity rose, but the data did not indicate that U.S. spot demand had taken the lead.

As of Oct. 16, the Coinbase premium stood at -0.137%. The daily series moved from -0.1313% on Oct. 12 to -0.0806% on Oct. 13, -0.1417% on Oct. 14 and -0.1392% on Oct. 15.

A negative premium means bitcoin is cheaper on Coinbase than in the overseas market used for comparison. The latest reading suggests U.S. buying demand remains subdued.

Bitcoin: Coinbase premium (%)

Coinbase Prime volume reached 7,097.03 BTC on Oct. 15, up 8.6% from 6,536.65 BTC the previous day. Its 24-hour dollar volume was about $391.43 million.

Prime volume reflects trading through Coinbase's institutional venue. Higher turnover indicates increased institutional participation, but the figure alone does not show whether buying or selling dominated.

CME bitcoin futures positioning among leveraged funds stood at 5,731 long contracts and 12,583 short contracts as of Oct. 6, according to the CFTC's weekly disclosure. Short positions substantially exceeded longs.

The VIX fell to 16.10 on Oct. 16 from 16.46 the previous day, a decline of 0.36. It had risen from 14.84 on Oct. 9 to 15.21 on Oct. 12, 15.27 on Oct. 13 and 16.87 on Oct. 14 before retreating.

A VIX reading below 20 is generally associated with relatively calm U.S. equity conditions, while a move above 20 signals greater unease. The current level suggests broad stock-market fear is not elevated.

The U.S. Dollar Index declined to 101.68 on Oct. 16 from 102.00 the previous day, down 0.32. The U.S. 10-year Treasury yield stood at 5.19% as of Oct. 14. A weaker dollar can support risk assets, while high yields can weigh on assets including crypto.

Institutional trading increased, but the negative Coinbase premium indicates the U.S. market has yet to enter a phase of paying more aggressively for bitcoin. Whether the premium turns positive and Prime activity remains elevated will be key signals to monitor.

Editor's note Wall Street Liquidity Radar assesses how U.S. investors view bitcoin through four indicators: CME leveraged-fund positioning, the Coinbase premium, the VIX and Coinbase Prime trading volume. Together, they offer a snapshot of short-term market direction and overall investment sentiment.

This article is based on market data and analysis and does not constitute investment advice.