What Is the Concept of ‘Contango’ and ‘Backwardation’ in Token Futures Markets?

Contango occurs when the price of a token's futures contract is higher than the current spot price. This is common and reflects the cost of carry (e.g. interest and storage).

Backwardation occurs when the futures price is lower than the spot price. This is less common and often signals that traders expect the spot price to fall or that there is high demand for the immediate token supply.

These conditions influence hedging and trading strategies.