Crypto Market Makers Cash In on Bitcoin's Rally Without Taking Directional Bets

Crypto market makers are capitalizing on Bitcoin's recent price surge without taking directional bets. Instead, they're employing a strategy known as a cash-and-carry or basis trade to collect funding rates.

This trade involves holding spot crypto positions while simultaneously shorting an equivalent amount via perpetual futures. As the two positions offset each other, traders have minimal exposure to price movements and instead capture the funding rate - a periodic payment that longs must pay to shorts when the market is bullish.

The current environment looks attractive for firms with the balance sheet and operational infrastructure to run the trade at scale. After months in which crypto markets offered little in the way of low-risk yield, the return of positive funding has brought the basis trade back to life - and with it, some of the most sophisticated players in the market.

Abraxas Capital, Fasanara Capital, and Wintermute have quietly built hundreds of millions of dollars in short perpetual futures positions on Hyperliquid. Collectively, the three firms hold short positions of 138,569 ETH (around $338 million) and 3,425 BTC (approximately $265 million), according to onchain data tracked by Lookonchain.

The basis trade has also spread beyond Bitcoin and Ethereum, with Solana among the assets seeing elevated carry. Notably, CryptoQuant data shows that hedge funds on CME have recently flipped net long on Bitcoin futures - a rare development given that the basis trade structurally keeps this cohort short.