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How Bitcoin ETFs are helping traders in Europe bag better returns

How Bitcoin ETFs are helping traders in Europe bag better returns
European session BTC traders are benefitting more than those who trade from other regions, helped by Bitcoin ETFs. Credit: JUSTIN LANE/EPA-EFE/Shutterstock
  • Bitcoin futures returns are significantly higher during European trading hours.
  • Asian hours proved the least profitable, offering negative returns until early February.

European trading sessions offered the best returns for Bitcoin futures traders over the past month, likely driven by changes in the US market.

Bitcoin futures returns on Binance, Bybit, OKX, and Deribit during European sessions were over 18% since mid-January, figures from crypto data firm Velo revealed. That’s significantly higher than those generated during US and Asian trading hours.

Returns during US trading hours are just over 12%. Returns during Asian hours spiked above 5% this week, after posting negative gains for most of the past month.

Returns during Asian hours have been positive since February 9, but are still considerably lower than US or European sessions.

What’s behind the spike in returns during European hours? The addition of Bitcoin exchange-traded funds likely played a role, according to crypto trading firm B2C2′s chief risk officer, Adam Farthing.

“The data on the ETF net flows is being published around the London open, and in the last week that has been the market’s main driver,” Farthing told DL News.

One Month BTC Cumulative Return By Session

In other words, the BlackRock- and Fidelity-led trading frenzy since Bitcoin ETFs were approved last month has ignited optimism. Data reports showing millions in daily inflows into those products has boosted markets at the time of their release.

Some overlap exists between the US and Europe — for most of the year, the eastern US time zone is only five hours behind that of London, for example.

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That means that traders in those regions can straddle both sessions during a four-hour window in US mornings and European afternoons.

The European session has no overlap with the Asian session, nor is there an overlap of the US and Asian sessions.

Importantly, Velo doesn’t include the one of the most popular venues for Bitcoin futures contracts, the CME.

The Chicago-based derivatives exchange overtook Binance based on the number of open futures contracts held by traders, or open interest, in November.

Changing fortunes

The uptick in returns during European hours is a new phenomenon.

Until recently, the US has lead the way over Asia and Europe. However, returns have increasingly improved for European traders since the beginning of the year, to challenge Asian returns.

The return by session is a measure of the performance of Bitcoin’s price at the beginning of a session and comparing it to the close of the session.

The “cumulative” aspect means that the analysis considers the aggregated returns over a specific period, in the case of the chart below, over six months.

Traders who purchased Bitcoin at the start of the US session and sold it at the end of the session for the last six months would be up over 49%.

For the EU and Asia Pacific sessions, those region-bound traders would be up approximately 27%, indicating Bitcoin gains over the last six months have been dominated by the US session.

Six Month BTC Cumulative Return By Session