Which Market Condition, Backwardation or Contango, Is More Common in Cryptocurrency Markets and Why?

Contango is the more common market condition in cryptocurrency markets. This is because, historically, cryptocurrencies have been appreciating assets, leading to a general expectation of future price increases.

This bullish bias results in futures prices typically trading at a premium to the spot price. Additionally, the costs of carry, while different from physical commodities, still contribute to a positive carry market.

Backwardation is a rarer occurrence, usually appearing only during periods of significant market stress or "extreme fear".