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Crypto
Basis Trading
Trading the difference between spot price and futures price of the same cryptocurrency.
Basis trading is popular among professional crypto traders because it is often lower risk than directional bets. It profits from the gap closing rather than the overall price direction. Many funds use it to earn steady returns with reduced volatility.
It's betting on whether the futures price is too high or too low compared to the real coin price.
Real world: If Bitcoin spot is $62,000 but perpetual futures are trading at $62,800, a trader can short the futures and buy spot, collecting the basis as profit when the prices converge.
💡 Basis trading is a smart, lower-risk way to make money from price differences in crypto.