[Wall Street liquidity radar] Bitcoin’s US discount narrows, but buying conviction remains weak

Bitcoin’s US price discount has narrowed from late October, suggesting some easing in weak demand. Institutional trading volume has also increased, although the discount persists and futures positioning remains tilted toward shorts.

The signals point to a tentative improvement in US buying conditions. Higher institutional turnover adds evidence of market participation, but does not establish stronger buying conviction.

The Coinbase premium stood at -0.16% on November 2 in the daily series. It moved from -0.27% on October 29 to -0.24% on October 30, -0.20% on October 31 and -0.16% on November 1. A separate intraday reading on November 2 was -0.19%, underscoring that the discount remained.

A positive premium indicates that bitcoin trades at a higher price on Coinbase than on Binance; a negative reading indicates the reverse. The discount has narrowed from October 29, although the daily series shows a slight widening on November 2 rather than an uninterrupted recovery.

Coinbase Prime, an institutional trading venue, recorded volume of 3,035.64 BTC on November 1, up from 2,436.10 BTC on October 31. Dollar-denominated trading volume over 24 hours was $369.13 million.

The increase indicates more trading activity through the institutional venue. Volume includes both purchases and sales, however, so it cannot by itself establish that institutions were accumulating bitcoin.

CFTC disclosures showed CME leveraged funds holding 5,887 long contracts and 9,866 short contracts as of October 27. Shorts exceeded longs. The figures are published weekly and therefore reflect an earlier positioning snapshot.

The VIX fell to 19.22 on November 2 from 19.42 on October 30, a decline of 0.20. It remained above its October 29 reading of 17.20 and October 28 reading of 16.91.

The volatility readings suggest that the latest easing in equity-market anxiety was modest relative to the preceding increase. That leaves a mixed backdrop for interpreting the improvement in bitcoin’s US price discount.

The dollar index also eased, falling to 101.60 on November 2 from 101.88 on October 30. The US 10-year Treasury yield was 4.98% as of October 29. The dollar’s decline accompanied the latest dip in volatility, while the yield reading came from an earlier date.

Taken together, the data suggest easing weakness in US bitcoin demand rather than clear buying conviction. The persistent spot discount, increased institutional turnover and larger short position leave the signals mixed, even as the dollar and VIX softened in their latest readings.

[Editor’s note] Wall Street liquidity radar examines US bitcoin sentiment through four indicators: CME leveraged-fund positioning, the Coinbase premium, the VIX and Coinbase Prime trading volume. Together, they provide context on futures exposure, relative spot pricing, equity-market anxiety and institutional trading activity.