Understanding Bitcoin Contango – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides


Over the last couple of weeks, the concept of “contango” — the situation where a futures price of a commodity is higher than the spot price, made popular among Bitcoiners by Preston Pysh and Plan B — has been discussed (and meme’d) throughout the Bitcoin community, particularly on Twitter. But what actually is contango? Why is it important? And how does it affect the price of bitcoin?

The goal of this piece is to provide you with the answers to these questions, in layman’s terms, in addition to explaining how contango accelerates the supply suffocation that is already naturally taking place due to Bitcoin’s programmatic, four-year supply halving.