The cash-and-carry trade in ether — buying spot and selling futures to harvest the spread — has become markedly less profitable as annualised basis on the main regulated venue slipped into the low single digits.
Funding rates on perpetual contracts, which had run persistently positive through the first half of the year, have oscillated around zero for three weeks. Desks that funded the trade with borrowed dollars now face carry costs close to the return.
The compression matters beyond the arbitrage community. Basis demand supports the futures curve and provides a natural bid for spot; when it fades, price discovery leans more heavily on directional flows.
Several market-neutral funds have rotated into altcoin basis, where spreads remain wider but liquidity is thinner and exchange risk higher. Risk officers at two multi-strategy firms said internal limits cap how far that rotation can go.
Whether the spread reopens depends largely on leverage demand. Historically, basis has widened whenever retail participation returns in force — a condition not yet visible in exchange account-opening data.
