Basis Trade

Hedge Funds

2026-09-30 00:27:43

Hedge funds take record share of U.S. Treasuries as regulators warn on deleveraging risk

Hedge funds have reached a record presence in the roughly $30 trillion U.S. Treasury market, according to a CNBC report cited by BlockBeats. Data from the U.S. Treasury’s Office of Financial Research show that, by the end of 2025, hedge funds held $2 trillion in cash Treasuries, about three times the level seen five years earlier and equal to 7% of the $28.9 trillion tradable Treasury market. Federal Reserve data also show that U.S.-domiciled hedge funds remained net buyers in the first half of 2026, purchasing $26.4 billion in the first quarter and $60.6 billion in the second, for a combined total of about $87 billion. The shift comes as long-term investors such as pension funds reduce demand for longer-dated Treasuries and allocate more capital to private credit. Regulators, including the Federal Reserve and the Bank for International Settlements, have warned that highly leveraged basis trades funded through repo markets could trigger margin calls, forced selling, and rapid deleveraging when volatility rises.

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Bitcoin ETF

2026-09-29 12:40:12

CoinShares says Bitcoin ETF inflows still do not clearly show institutional demand

CoinShares says the latest wave of money moving into Bitcoin exchange-traded funds does not offer a clean read on institutional demand. James Butterfill, the firm’s head of research, told Cointelegraph that US crypto investment products drew about $4.1 billion in September, with BlackRock’s iShares Bitcoin Trust ETF, or IBIT, taking more than 53% of that total. He said that may hint at institutional participation, but ETF inflows can also reflect basis trades rather than outright bullish bets on Bitcoin. Butterfill said many institutions use IBIT in a Bitcoin basis trade, a strategy that involves buying spot Bitcoin ETF shares while shorting Bitcoin futures to capture the spread as spot and futures prices converge. He said the trade was offering an attractive 6% yield at the time. CoinShares later shared updated figures showing September inflows into US crypto investment products had risen to about $4.44 billion, versus $4.53 billion globally. Bitcoin products led with $2.84 billion, followed by Ether at roughly $946 million and Zcash at $284 million. Butterfill also pointed to a rotation inside digital assets, saying investors are paying more attention to companies that generate revenue from crypto adoption. He cited earlier CoinShares data showing more than $100 million had flowed into blockchain equities over the previous month.

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Ethena

2026-09-25 13:46:22

Ethena adds tokenized U.S. stocks to USDe strategy as Binance equity perpetual OI tops $2.9 billion

Ethena has expanded the yield engine behind USDe beyond crypto perpetuals and into U.S. equities. The project said it is now using Binance bStocks tokenized stocks as part of USDe’s underlying allocation strategy while shorting the matching Binance equity perpetual contracts to build a delta-neutral basis trade. In practice, the setup is designed to avoid taking a directional view on stock prices and instead earn from the spread between spot and perpetual markets, including funding payments. According to data cited by Ethena, total open interest in Binance equity perpetuals has climbed above $2.9 billion, with a year-to-date monthly compound growth rate of about 105%. Over the past six months, the average annualized basis across related stock trades was about 3.56%. The move comes as the tokenized stock market itself has also expanded, with Binance Research saying active tokenized equity market capitalization rose about 314% this year to $4 billion by early September, while monthly trading volume increased from roughly $237 million in January to about $7.9 billion in August. Ethena said the point is not to turn USDe into a stock-backed stablecoin. Instead, the added strategy gives the nearly $5 billion asset pool another source of yield that does not fully depend on the funding cycle in crypto perpetual markets.

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Bitcoin

2026-08-31 07:22:40

Market makers pile into BTC and ETH basis trades as Bitcoin rebound revives funding-rate carry

Bitcoin surged from $62,000 to above $77,000 within days last week, wiping out traders who had added short exposure during the pullback and pushing liquidations across derivatives markets to $3 billion. Yet for professional crypto trading firms, the rally has also reopened a different playbook: cash-and-carry arbitrage. According to Lookonchain, market makers and trading firms including Abraxas Capital, Fasanara Capital, and Wintermute have built large perpetual futures short positions on Hyperliquid while holding spot inventory. Their combined short exposure stands at 138,569 ETH, valued at about $338 million, and 3,425 BTC, worth about $265 million. Arkham Intelligence data also shows Abraxas Capital withdrawing spot assets from centralized exchanges, including 73,872 ETH from Binance over the past four days, valued at $173 million. Data from Coinglass, Coinalyze, Aegis, Glassnode, and CryptoQuant points to a broader shift: funding rates have turned positive again, CME Bitcoin open interest has climbed sharply, and some hedge funds on CME have even moved into net-long futures positioning. At the same time, traders are warning that crowded leveraged longs could leave the market vulnerable if momentum fades.

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Bitcoin

2026-08-31 07:29:08

$600 Million in Crypto Shorts Stayed Safe as Market Makers Harvested Funding Instead of Betting on a Drop

Bitcoin’s run from around $62,000 to above $77,000 wiped out roughly $3 billion in leveraged short positions in three days, forcing more than 170,000 traders out of the market. Yet large short positions linked by Lookonchain to Abraxas Capital, Fasanara Capital and Wintermute remained intact on Hyperliquid, totaling more than $600 million across ETH and BTC. The article argues those positions were not straightforward bearish bets. On-chain data from Arkham Intelligence showed Abraxas Capital withdrew 73,872 ETH from Binance over four days while holding shorts, pointing to a hedged cash-and-carry setup rather than directional exposure. In that structure, firms buy spot, short perpetual futures, and collect funding payments when the market is crowded on the long side. Aegis data cited in the piece showed BTC perpetual funding annualized at 6.7% on a 30-day average and 8.7% on a 7-day average as of Aug. 24, levels that 21shares Capital Markets described as attractive for arbitrage. The report also highlighted a split in market structure: some firms appear to be running market-neutral basis trades on venues such as Hyperliquid, while signals from CME suggest other institutional players have started adding directional long exposure. In that setup, the cost is borne by leveraged longs paying funding every eight hours.

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Bitcoin

2026-08-30 12:18:36

Market Makers Profit From Bitcoin’s Rally Without Taking a Directional Bet

Bitcoin’s latest rally may have created a class of winners that are not actually betting on price direction. According to an Aug. 28 report cited by ABMedia from CoinDesk, crypto market makers have been using delta-neutral strategies to capture returns from Bitcoin market activity while keeping directional exposure close to zero. The basic setup is straightforward: hold spot BTC while taking an offsetting short position in derivatives, so gains are tied less to whether Bitcoin rises or falls and more to structural features of the market itself. The report points to three main sources of return: perpetual futures funding rates, futures premiums over spot prices known as basis, and staking rewards. In bullish conditions, retail traders often pile into leveraged long positions, pushing perpetual funding rates into positive territory and forcing longs to pay shorts. ABMedia said positive funding rates of 0.01% to 0.05% every eight hours are not unusual in such periods. Basis trades can also become more attractive when futures trade above spot, allowing firms to buy spot, short the premium futures contract, and collect the spread as prices converge at expiry. As leverage demand rises, both funding income and basis returns can expand.

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CME

2026-08-25 14:15:04

CME launches BTIC product to manage Bitcoin futures expiry risk

CME Group has launched a BTIC, or Basis Trade at Index Close, product aimed at helping market participants manage Bitcoin futures expiry risk more effectively. The product lets traders conduct basis trades at the close of the index when futures contracts expire, which is meant to smooth the settlement process. Crypto Briefing said the move is a sign of rising maturity in the crypto market and growing institutional adoption.

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Arthur Hayes

2026-08-25 09:17:27

Arthur Hayes Renews Bullish Call on ENA, Says Basis Trade Return Is a Positive Signal

BitMEX founder Arthur Hayes has again voiced optimism on ENA, saying over-the-counter brokers have started reaching out to ask about borrowing dollars, which he described as a sign that the basis trade is returning. Hayes said interest rates are still too low, but argued that the shift is constructive for ENA and that the token has substantial upside. The latest remarks follow his earlier purchases this month, when he accumulated 22.64 million ENA worth about $2 million. Earlier in the month, Hayes also said that if rising U.S. dollar liquidity helps push BTC higher, a recovery in bitcoin basis yields could draw capital back into USDe. He added at that time that ENA could have the potential to rise fivefold over the coming months. Despite that view, HTX market data showed ENA was down 7.1% over the past 24 hours, trading at $0.15.

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