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"Hmm, will the price of BTC reach $60K before the halving?"
The price of cryptocurrency king Bitcoin (BTC) breaking through $57,574 has driven up the cost of holding leveraged futures bets thus creating arbitrage opportunities for non-directional traders.
By observation, the annual funding rate in BTC perpetual futures listed on Binance has surpassed 100% for the first time in at least a year while the funding rate on Bybit and Deribit rose 95% and 56% respectively.
The positive funding rate shows that perpetuals are traded at a premium to the spot price and require traders who hold buy positions to pay fees to those who hold sell positions, so here it can be seen that it is the cause of the rise in BTC prices.
According to 10X Research founder Markus Thielen, the increase in funding rates may be due to traders expecting BTC prices to rise following continued inflows into US-based spot BTC ETFs.
He added that BTC is expected to continue to climb further as the funding rate and open interest continues to increase which is now at $14.4 billion and he is also more and more confident that the inflow of halvings and ETFs will be a bullish driver for the price of the digital asset.
It is well known that arbitrage involves profiting from price discrepancies between the two markets where high funding rates mean that perpetuals are traded at a significant premium to the spot price.
As of this writing, BTC price has surged by 3.56% to $56,855 in the last 24 hours with a market capitalization of over $1 trillion and is up 9.05% over the past week.
