Basis Trade
Profiting from the gap between an asset's spot price and its futures price — a market-neutral crypto yield staple.
A basis trade harvests the difference (“basis”) between an asset’s spot price and its futures price. When futures trade above spot (contango), a trader buys spot and sells the future, locking in the premium as the two converge at expiry — earning yield regardless of price direction.
In crypto, the perpetual-futures version captures the funding rate: hold spot, short the perpetual, collect funding when it’s positive. It’s a cornerstone of “market-neutral” crypto strategies and a big driver of institutional flows. The risks are unglamorous but real — funding can flip negative, exchanges can fail, and the trade ties up capital on both legs.