What is a perpetual Futures funding rate?

Since the prices of assets traded as perpetual contracts may differ slightly from their spot market prices, the funding rate is used to keep them as close as possible. For example, if the price of BTC is $19k in the spot market, it could be $19.05k in the perpetual futures market.

How do bitcoin futures contracts work?

The value of the contract is designed to always follow the actual price of Bitcoin. If the price of the Bitcoin rises or drops, so does the price of the contracts. Traditional futures contract come with an expiration / settlement date. These contracts are settled once a month or quarterly depending on the exchange.

How does bitcoin funding rate work?

Funding rate usually works against popular traders. If most traders are long BTC then the funding rate tend to increase and that confirms the buying interest. If more traders are shorting Bitcoin then funding rate tend to go negative and that confirms the selling interest. Historically Bitcoin has been on a bullish upward trending market.

What are crypto funding rates?

Access Indicator Alerts What Are Funding Rates? The crypto funding rate indicates how much a trader has to pay, or how much they will receive every 8 hours (typically), for being long or short on a perpetual contract.