The post Bitcoin funding rate: analysis of the changes appeared on BitcoinEthereumNews.com.

Bitcoin funding rate represents one of the most monitored tools in the universe of crypto derivatives, a central element that in recent years has radically changed balances, strategies, and opportunities for traders and institutional operators. The reflection on the evolution of the Bitcoin perpetual swap market, especially through the lens of the funding rates of XBTUSD on BitMEX, shows a constantly transforming context that influences both the volatility and the profitability of investments. Perpetual swaps and Bitcoin funding rate: an innovation in crypto trading At the core of the crypto derivatives revolution are the perpetual swaps, financial instruments first introduced by BitMEX, designed to allow exposure to Bitcoin without having to trade the underlying asset directly or worry about expirations. Central to perpetual swaps is the funding rate: a periodic payment mechanism between those holding long and short positions, designed to keep the swap contract price in line with the spot price. A positive funding rate implies that those who are long pay those who are short (and vice versa in case of a negative rate). This tool has become essential for fueling arbitrage strategies, interpreting market sentiment, and, above all, offering systematic profit opportunities, at least in the more speculative phases of the history of Bitcoin derivatives. The historical analysis of almost nine years of funding rate XBTUSD shows how the market has gone through three distinct phases, from pure speculative volatility to an almost institutional stability reached between 2024 and 2025. The early years of XBTUSD’s activity were characterized by inefficiencies and off-the-scale volatility of the funding rate: rates that often exceeded 0.3% per single period, with annualized peaks over 1,000% and frequent “extreme events” almost every day. These spikes sometimes lasted for several consecutive intervals, highlighting a highly speculative and poorly regulated market. Between 2018 and 2024…

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Filed under: News - @ June 30, 2025 7:26 pm