Crypto Market Makers Profit from Basis Trading Amid Bitcoin Rebound
Bitcoin surged from around $62,000 to $77,000 last week, liquidating approximately $3 billion in leveraged short positions. Major crypto market makers such as Abraxas Capital, Fasanara Capital, and Wintermute established hundreds of millions of dollars in perpetual contract short positions on Hyperliquid. The three firms collectively hold short positions of 138,569 ETH (approximately $338 million) and 3,425 BTC (approximately $265 million). Abraxas Capital withdrew 73,872 ETH (approximately $173 million) from Binance in the past four days. This strategy, known as cash arbitrage or basis trading, involves traders holding spot positions while shorting an equivalent amount of assets through perpetual contracts to hedge against price volatility risks, primarily earning the funding rates paid from longs to shorts. On August 24, the 30-day average funding rate for Bitcoin perpetual contracts was annualized at 6.7%, with a 7-day average of 8.7%. CME Bitcoin futures open interest rose from about 87,000 BTC to 122,000 BTC, indicating that this trading has extended into regulated markets.
-- Price
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