What Is “Contango” and “Backwardation” in the Context of Crypto Futures?

Contango is a market condition where the futures price is trading above the expected spot price or the current spot price. This is common when there is a positive cost of carry.

Backwardation is the opposite condition, where the futures price is trading below the spot price. In crypto, backwardation can sometimes signal strong spot demand or expectations of a future price decline.

These conditions reflect market expectations.