Thanks to the introduction of bitcoin futures, traders interested in profiting from bitcoin’s price volatility now have a new way to make money: arbitrage.

Since they were introduced, bitcoin futures have traded at a premium to the spot price of bitcoin. For example, they shot up to trade at an asking price of almost $1,000 more than the spot price of bitcoin on the first day of trading. Since then, their fluctuations with respect to the spot price of bitcoin have ranged from 5% to 15%.

At 19:08 UTC on December 14, bitcoin was trading at $16,423.42, unchanged from its price 24 hours ago. The settlement price for a bitcoin futures contract expiring on January 18 is $17,055 on the CBOE website, as of this writing. (See also: Bitcoin Futures On CME vs. CBOE: What's The Difference?)

There are a couple of reasons for the difference in prices. First, there is not enough liquidity on the bitcoin futures markets to arrive at a settlement price that is close to the digital currency’s spot price. During the first two days of trading, bitcoin futures had a volume of $107 million, a figure that may not be enough for price discovery of the volatile asset. For context, Coinmarketcap.com lists bitcoin trading volumes at 19:08 UTC as $13.5 billion in just the last 24 hours.

The second reason is related to the first. Because there is not enough liquidity, the volatility of bitcoin’s spot markets is not being ameliorated in its futures contract pricing. “What we are looking at trying to pick a settlement price that is out in the future and a highly, highly volatile underlying spot market,” said Ed Tilly, CEO at CBOE. 

Typically, the entry of speculators helps iron out price differences between spot and futures markets to enable price discovery for producers, who have sold the futures contract, and buyers interested in the final product. Bitcoin futures are cash-settled. This might have provided an opening to gamblers, according to cryptocurrency investor Aaron Brown. Consequently, they might have pushed up prices for contracts to maximize profits. The absence of sufficient liquidity volumes may have exaggerated their effect on future markets. (See also: Four Problems With Bitcoin Futures.) 

But the situation may be temporary. In his interview with Bloomberg, CBOE’s Tilly said arbitrage will close the gap between spot and futures contract markets in days and weeks. Some of that is already happening.

According to another Bloomberg report, the price spread between bitcoin futures contract prices and spot prices has reduced by more than half in the last couple of days. A prominent brokerage firm is allowing its clients to bet against futures bitcoin prices in the markets. Earlier, Interactive Brokers Group Inc. allowed clients to only take long positions against the cryptocurrency.