Funding Rates Drain Crypto Traders' Accounts

The crypto market has seen a significant shift in how traders view funding rates on perpetual futures. What was once a negligible line item is now being tracked with the same intensity as spot prices.

Funding rates can have a profound impact on traders' account balances, often exceeding 30% when annualized, and can even distort market positioning.

Retail traders are particularly vulnerable to funding rate imbalances due to the asymmetry of information, while institutions face reputational risk if they fail to disclose funding costs accurately.