The crypto basis trade: what six years of Binance data say it earned

Hold a coin, sell the same amount as a future, and collect the difference: the basis trade is often described as the closest thing crypto has to an interest rate. We tested it on every funding payment Binance has made since 2020. On Bitcoin and Ethereum it earned between 7 % and 10 % a year with small dips. On Solana it lost money, most of it in a single month. This guide explains how the trade works, what it earned, and where the risk sits.

How the trade works

The trade has two legs.

• Long the coin. You hold, say, $100,000 of Bitcoin.
• Short the future. You sell $100,000 of Bitcoin futures against it.

If Bitcoin rises 10 %, the coins gain $10,000 and the short future loses $10,000. If it falls 10 %, it is the other way round. The price of Bitcoin no longer matters to the position.

The income comes from the future. There are two versions:

• With perpetual futures. A perpetual future has no end date. To keep its price near the coin, holders of long positions pay holders of short positions a funding rate every 8 hours, as long as the rate is positive. The short side of the basis trade collects it. Our guide to crypto funding rates explains where this payment comes from.
• With dated futures. A future with an end date often trades above the coin. Selling it and holding the coin locks in that gap, which closes by the end date. This is the classic cash-and-carry trade, the same idea institutions use with regulated futures.

"Basis" is the name for the gap between the price of the future and the price of the coin. The trade earns when short positions are paid to exist, which is when many traders want leveraged long positions.

What we tested

We modelled the perpetual version on Binance, the largest crypto futures exchange:

• $100,000 of the coin held as collateral, and $100,000 of the coin-margined perpetual future sold against it, with no leverage beyond that.
• Every funding payment collected or paid as it happened, and turned into dollars at once.
• Trading fees included (0.11 % on the coin, 0.06 % on the future).
• Bitcoin and Ethereum from August 2020, Solana from September 2021, all to 13 November 2026.

Basis trade on $100,000	Bitcoin	Ethereum	Solana
Total profit, whole period	+$59,279	+$58,610	−$13,877
Return per year, income left as cash	7.7 %	7.7 %	−2.8 %
Return per year, income taken out	9.5 %	9.4 %	−2.7 %
Return per year, income reinvested	9.9 %	9.8 %	−2.3 %
Worst dip of the account	−3.0 %	−2.8 %	−44.5 %
Holding the coin instead: worst fall	−76 %	−79 %	−96 %
US Treasury bills, same period, per year	3.2 %	3.2 %	3.8 %

*Hypothetical backtest on Binance coin-margined perpetual futures, after trading fees, before taxes. Past results say nothing certain about the future.*

The three "return per year" rows are the same trade, counted three ways. In the first, the collected income sits in the account as cash and earns nothing. In the second, it is taken out each time, so the yearly income is compared with the $100,000 that stays invested. In the third, it is added to the position. The trade itself does not change; only what happens to the income does.

Where the income came from

The income was not steady. It followed the funding rate, and the funding rate follows the mood of the market.

Average funding rate, per year	Bitcoin	Ethereum	Solana
2020 (from August)	16.1%	18.2%	–
2021	22.3%	24.0%	18.5%
2022	1.8%	−1.0%	−36.3%
2023	7.5%	7.4%	3.6%
2024	12.2%	13.1%	15.1%
2025	5.1%	4.7%	1.0%
2026 (to 13 November)	4.5%	3.2%	1.9%

Most of the Bitcoin and Ethereum income came in two years, 2021 and 2024, when leveraged buyers paid heavily to hold long positions. In 2022 the trade earned almost nothing, and in 2022 and 2025 it earned less than Treasury bills paid. Over the whole period, about one Bitcoin payment in five was negative: on those, the short side paid.

What went wrong on Solana

"Price-neutral" is not the same as "safe". Solana shows why.

In November 2022 the exchange FTX collapsed. Solana was closely tied to FTX, and traders rushed to bet against it. With so many short positions, the funding rate turned sharply negative: on Binance it fell as low as −2.5 % per 8 hours. The short side of the basis trade, which normally collects, now had to pay, several times a day. At the same time the future traded far below the coin.

In our backtest the Solana position lost about $37,000 of its $100,000 in that one month, and the account was at one point 44.5 % below its earlier high. The years before and after were positive, but not by enough to make up for it.

A simple filter would have helped: stepping aside whenever the average funding rate of the past seven days was below zero turned the Solana result from a loss into a gain of about $16,600. The same filter lowered the result for Bitcoin and Ethereum, because it also stepped aside in periods that recovered quickly. There is no free lunch in the filter either.

The risks a backtest does not show

• The exchange. Both legs sit on an exchange. If it fails or freezes withdrawals, as FTX did, a neutral position does not protect the money held there. This is the largest risk of the trade, and it is not in the numbers above.
• Forced closing. Our model uses no extra leverage. Versions that put up less collateral can be closed by force when the price jumps, at the worst moment and at a loss.
• Negative funding. The income can turn into a cost for days or weeks. The longest stretch of negative funding in our record was 8 days for Bitcoin, 16 for Ethereum and 18 for Solana.
• The gap at entry and exit. The future and the coin do not trade at the same price. Opening or closing the position when the gap is against you costs money.
• Crowding. The more capital does this trade, the lower the funding rate. Since 2025 the average has been below half of its usual resting level.
• Costs and taxes. Fees are in the backtest; taxes are not, and every funding payment can be a taxable event.

What the basis trade tells you as an observer

Even for someone who never does the trade, its yield is a useful reading. It is the price that leveraged buyers pay to stay in. When it is far above 10.95 % a year, the resting level of the funding formula, leverage is in strong demand. When it is negative, the crowd is positioned the other way. It describes positioning; it is not a forecast.

See it live

Crypto Flows is the order-flow desk in our Research Terminal. Its basis trade panel shows this backtest for Bitcoin, Ethereum and Solana with the account value over time, the funding rate behind it and the result year by year, updated every day, next to the live funding rate on six exchanges.

See Crypto Flows →

*Hypothetical backtest and recorded market data. Educational research, not investment advice.*

Frequently asked questions

Hamann, H. (2026). The crypto basis trade: what six years of Binance data say it earned. InvestWealth.com. https://www.investwealth.com/learn/guides/crypto-basis-trade

<a href="https://www.investwealth.com/learn/guides/crypto-basis-trade">The crypto basis trade: what six years of Binance data say it earned</a> (InvestWealth.com)