Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.
Arbitrage strategies, among the most popular approaches during previous crypto market bull runs, are back in vogue thanks to the widening spread between prices for perpetual futures tied to bitcoin
The difference, represented by funding rates , has surged above an annualized 10% across major exchanges, including Binance, according to Velo Data. Positive funding rates mean buyers, or longs, pay shorts to keep their leveraged bullish bets open.by selling perpetual futures while simultaneously buying the cryptocurrency in the spot market. That allows them to safely pocket the 10% in funding while bypassing the risk from a continued price rally.
"This is an excellent market for arbitrage opportunities where risk-free returns of 10-20% can be achieved," crypto services provider Matrixport's research and strategy head Markus Thielen said."BTC's annualized perp premium was 40% yesterday. It has pulled back to 13% today, but still good enough for arbitrage trades."
The surge in the perp premium is consistent with the previous bullish trends. Bitcoin has risen 25% in four weeks, with most gains happening during North American trading hours. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of
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