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Institutional alpha in cryptocurrency basis trades
In a market addicted to hype and volatility, institutional players are quietly milking a structural inefficiency: basis trading. It is not sexy, but it is repeatable and that is exactly why it is winning. What is the basis trade? The basis refers to the difference between the price of a crypto asset in the spot market and its futures market. A positive basis (futures trading above spot) implies a contango structure, common in bullish or highly speculative environments. This creates an opportunity to: Buy spot crypto (or a physically backed crypto ETP), Short crypto futures, and Capture the yield as the futures ... (full story)