Trading Bitcoin Futures Trade setting, March 1, 2023 Suppose that the spot price of Bitcoin is $20,000 and that the all-in cost of financing bitcoin is 8% at an annualized rate. This all-in cost includes both financing and storage/custodian costs including insurance, and other custodian related costs. Assume that the cost curve is flat thru time meaning the same annualized 8% cost applies to any holding period. April and May CME Bitcoin futures are trading at prices listed below. Bitcoin Spot and Futures Prices

	Price	Days to expiry
Spot	20,000	-
April	20,300	58
May	20,500	86

1. Would you rather hold Bitcoin or April Bitcoin futures? Why?

2. The April/May Bitcoin calendar spread is defined as April Futures Price-May Futures Price. What is the fair value of the calendar spread? Is it rich or cheap? (rich means April is too high relative to May)