Bitcoin CME Futures Spread Shrinks to $490, Wiping Out the ‘Trump Bump’ Effect

Bitcoin CME Futures Spread Drops to $495, Wiping Out ‘Trump Bump’ Gains

The idea that a pro-crypto U.S. President would significantly boost the industry appears to be fading, with macroeconomic forces now driving the market instead.

After Donald Trump’s victory in the Nov. 5 Presidential election, optimism surged in the crypto space. However, that enthusiasm has now dissipated, as reflected in a key indicator tied to CME bitcoin (BTC) futures.

The spread between “continuous” next-month and front-month BTC futures has narrowed to $495, its lowest level since Nov. 5, down from a peak of $1,705 on Dec. 17, according to TradingView data. This retracement suggests that the initial post-election rally has completely unwound, pointing to fading bullish momentum.

“The contraction in the spread between front-month and next-month CME Bitcoin futures suggests that traders are lowering their price projections,” noted Thomas Erdösi, head of product at CF Benchmarks, in an interview with CoinDesk.

The market’s shift away from the “Trump bump” implies that investors are once again prioritizing macroeconomic trends over political narratives.

“We’ve seen the front contract basis adjust significantly lower since March, indicating that the short-term excitement following President Trump’s election has been fully priced in,” Erdösi added.

This recalibration is evident in market performance. Since early February, Bitcoin has declined 20%, while the Nasdaq, a tech-heavy stock index, has lost 8%. Market participants have been grappling with factors such as geopolitical instability, Trump’s new tariff policies, and ongoing concerns about inflation and economic growth.

Another source of disappointment was the lack of fresh Bitcoin purchases in Trump’s recently announced Strategic Digital Asset Reserve. Last week, the President signed an executive order creating the reserve, which includes BTC seized through enforcement actions.

“The Strategic Bitcoin Reserve announcement fell short of market expectations. Many anticipated that the reserve would actively purchase Bitcoin, but instead, the plan was simply to retain existing confiscated BTC. While this is a positive long-term signal, it still triggered a sharp market correction,” said Ian Balina, CEO of Token Metrics, in a statement to CoinDesk.

Futures Market Maintains Contango Structure

Despite the tightening spread in CME Bitcoin futures, the overall market structure remains in contango, where futures contracts with longer expirations trade at a premium to shorter-dated ones. This reflects normal market conditions influenced by factors like storage costs, financing rates, and expectations for future price appreciation.

“With perpetual funding rates staying positive and the futures curve still in contango, the recent sell-off appears to be driven more by unleveraged spot selling rather than systemic market weakness,” Erdösi explained.

As macroeconomic conditions continue to shape Bitcoin’s price action, investors will be closely monitoring future policy developments and economic shifts to gauge the cryptocurrency’s next move.