Bitcoin
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Bitcoin’s basis trade, which profits from the gap between spot and futures prices, has remained subdued throughout 2025—but a potential Federal Reserve rate cut on Sept. 17 could revive the strategy.

According to CME FedWatch data, there’s roughly a 90% probability that the Fed will lower the federal funds target rate by 25 basis points from the current 4.25%-4.50% range. A shift toward looser monetary policy could increase leverage demand, pushing futures premiums higher and breathing new life into a trade that has struggled this year.

The basis trade involves taking opposing positions in the spot and futures markets—buying bitcoin in one while selling it in the other—to capture the spread as it narrows near futures expiry. The strategy is designed to profit while limiting exposure to BTC’s price swings.

With interest rates still above 4%, the annualized return on the trade—around 8%—has not been compelling. Investors are expected to wait for lower rates before reallocating capital into this strategy rather than holding cash.

Data from Glassnode shows CME bitcoin futures open interest has fallen from over 212,000 BTC at the start of the year to roughly 130,000 BTC, similar to levels observed during the launch of spot BTC ETFs in January 2024. Meanwhile, annualized basis returns have remained below 10% in 2025, according to Velo, contrasting sharply with last year’s 20% peak.

Weakness in the trade reflects both macro and market factors: tighter funding conditions, slower ETF inflows after 2024’s boom, and reduced risk appetite. Bitcoin’s compressed trading range has also capped futures premiums, with implied volatility near 40—just above last week’s record low of 35.

If the Fed moves to cut rates, analysts anticipate easing liquidity conditions could spur renewed institutional activity. Higher demand for risk assets may boost CME futures open interest and help the basis trade regain traction after a year of stagnation.