BlockBeats News, January 21 — According to Bloomberg, a key arbitrage trade in the cryptocurrency derivatives market is falling apart. Wall Street institutions previously employed a “cash-and-carry trade” strategy by buying spot Bitcoin and selling futures to capture the price difference. However, due to a surge of capital inflows causing the spread to narrow sharply, the annualized return has dropped from about 17% a year ago to approximately 4.7% now, making it nearly impossible to cover funding costs.
Market participants point out that the era of near risk-free high returns may be over, and traders are shifting towards more complex strategies in decentralized markets. CME Group stated that institutional investors are diversifying from Bitcoin into other tokens such as Ethereum.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
New Crypto Buyers Enter the Market: Kazakhstan Plans to Invest Up to $350 Million
The Central Bank of Kazakhstan plans to invest up to $350 million in crypto assets, with investments starting from April to May, accounting for only 0.5% of reserves. At the same time, crypto assets seized by law enforcement will also be included in the national crypto fund, demonstrating the country's further recognition and cautious attitude towards cryptocurrencies.
PANews9m ago
Bitcoin Gold Price Soars 12.83%: Institutional Interest Grows
Bitcoin Gold's price surged by 12.83% to $0.554349, reflecting increased market interest, particularly from institutional investors. Active trading indicates growing retail participation. Traders are monitoring key price levels for potential future trends.
Coinfomania9m ago
UK Reform Party leader Farage invests in Bitcoin company Stack BTC, acquires 6.31% equity
UK Reform Party leader Nigel Farage invests in London Bitcoin company Stack BTC, acquiring a 6.31% stake. This funding round also attracted Blockchain.com to participate, with plans to jointly establish a Bitcoin reserve. Farage believes London should become a global cryptocurrency hub.
GateNews10m ago
Bitcoin shows resilience, options market indicates easing of downside concerns
Despite international oil prices rising to $115 and the market shifting to a defensive stance, Bitcoin has shown resilience, with options flow indicating reduced downside concerns. Market optimism towards Bitcoin is returning, with focus on this week's economic data.
GateNews24m ago
