Analysis: Funding Rate Below SOFR, Bitcoin Basis Trade Attractiveness Weakens

CoinFeed June 30 news, according to BIT analysis, unlike 2022, in the current Bitcoin downward cycle, crypto hedge funds have found it difficult to obtain the relatively stable arbitrage returns from spot-futures basis trades as in the past. The strategy typically involves buying spot and selling futures to capture the spread between spot and futures. Previously, after deducting SOFR-based funding costs, such unlevered strategies could achieve annualized returns of 5%–10%; but with rising interest rates and declining retail participation in futures trading, the related premium has continued to narrow. Data also confirms this change: currently, Bitcoin's annualized funding rate is about 2.9%, lower than the 3.7% SOFR, meaning the spread between the funding rate and SOFR has turned negative since February 2026. This trend can be traced back to the decline in retail participation in February 2025.