Cryptocurrencies
The ‘Risk-Free’ Crypto Trade Is Back In a Big Way
- Futures curve at steepest in five months ahead of ETF debut
- Traders buy spot Bitcoin, sell futures to lock in arbitrage
Photographer: Angel Garcia/Bloomberg
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The closest thing to a risk-free bet has reemerged in the cryptocurrency market as traders -- awaiting the launch of the first Bitcoin exchange-traded fund -- bid up the price of futures.
The spread between Bitcoin futures and the digital currency’s price offers the widest annualized return in five months, according to data from FRNT Financial. That means the so-called basis trade, whereby a speculator buys Bitcoin in the spot market and sells long-dated futures to lock in the discrepancy between the two prices, has turned back on. And it’s happening amid a price surge in Bitcoin that’s been bolstered by optimism the Securities and Exchange Commission is poised to allow the first U.S. Bitcoin futures ETF to begin trading soon.