There seems to be no stopping the bitcoin freight train. That’s driving the cost of holding leveraged bullish bets in perpetual futures skywards, creating an attractive arbitrage opportunity for non-directional traders.
Early Tuesday, bitcoin (BTC) rose nearly to $57,000, the highest since late 2021, taking the year-to-date gain to 32%, CoinDesk data show. The CoinDesk 20 index, a broader market gauge, traded nearly 6% higher.
The annualized funding rate in bitcoin perpetual futures listed on Binance surpassed 100% for the first time in at least a year, according to data source Velo Data and CoinGlass. Funding rates on Bybit and Deribit rose to 95% and 56%, respectively.
Perpetuals or futures with no expiry use funding rates to keep prices for perpetuals in sync with the spot prices. A positive funding rate indicates that perpetuals are trading at a premium to the spot price and requires traders holding long or buy positions to pay a fee to those holding short positions. Exchanges collect funding every eight hours.
In other words, a positive and rising funding rate indicates a bullish mood in the market or that the leverage is skewed bullish.
Markus Thielen, founder of 10X Research, said the rising funding rates likely stem from traders taking bullish bets in anticipation of continued inflows into the U.S.-based spot ETFs.
The perp funding rates are exploding, while open interest keeps climbing, now at $14.4 billion,” Markus Thielen, founder of 10X Research, who predicted bitcoin’s rise to $57,000, said. “Traders are becoming increasingly confident that the halving and the ETF inflows will be bullish.” #BTC #TrendingTopic 
