Coinbase's Premium Sinks to 12-Month Low Point
Coinbase Premium Plunges to 12-Month Low, Indicating Stronger Global Demand for Bitcoin
The Coinbase Premium, a measure of the difference between Bitcoin's price on Coinbase (a popular U.S. exchange) and Binance (a global exchange), reached a 12-month low of -0.237 by early 2025. This indicates that global investors, as reflected mostly on Binance, have exhibited higher buying pressure or lower selling pressure compared to U.S. investors on Coinbase.
This decrease can be attributed to a shift in investor demand dynamics, where global markets were more aggressive in Bitcoin purchasing than U.S. markets, lowering the premium or pushing it negative. Broader market volatility, risk appetite changes, and institutional moves and regulatory developments may have also played a role in this trend.
The negative Coinbase Premium could be a bullish sign for Bitcoin's short-term price recovery. A potential for a short-term rebound in BTC prices exists, as global investors are showing strength, possibly leading U.S. investors to follow suit, closing the price gap. However, continued divergence between U.S. and global investor behavior may imply some uncertainty, so price recovery is not guaranteed but is supported by these demand signals.
It's important to note that the drop in the Coinbase Premium coincided with rising uncertainty ahead of the U.S. presidential election, low market liquidity, and growing selling pressure in Bitcoin. CryptoQuant analyst Burak Keshmechi made this observation, stating that this drop signifies insufficient institutional demand, which could hinder Bitcoin's short-term price recovery according to his analysis.
At the time of writing, Bitcoin is trading near $96,760, up 3.5% over the last 24 hours, according to CoinGecko. Improved macroeconomic conditions and renewed institutional activity are needed for the market to regain momentum, as stated by Keshmechi.
[1] Investopedia. (2021). Coinbase Premium. Retrieved from https://www.investopedia.com/terms/c/coinbasepremium.asp [2] Coinbase. (2021). What is the Coinbase Premium? Retrieved from https://help.coinbase.com/en/coinbase/trading-and-funding/trading-faq/what-is-the-coinbase-premium [3] CryptoQuant. (2021). Coinbase Premium. Retrieved from https://www.cryptoquant.com/metrics/coinbase-premium
[1] The negative Coinbase Premium, a reflection of the difference between Bitcoin's price on Coinbase and Binance, suggests that global finance, driven by technology, has shown stronger demand for Bitcoin compared to U.S. investors.
[2] The potential short-term rebound in BTC prices could be influenced by this global demand for Bitcoin, as technology may enable U.S. investors to follow the trend, thereby closing the price gap.
