Crypto futures basis: what it is and how it works
Basis in crypto futures is the gap between a futures price and spot. Positive basis usually puts futures above spot; negative basis puts them below.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- Demand, leverage, and time to expiry move basis.
- Traders watch basis to compare futures and spot demand.
- Basis is not a funding rate, which applies to perpetual swaps.
- A positive basis can narrow or flip.
Basis in crypto futures is the gap between the futures price and the spot price of the same asset. It is positive when futures trade above spot and negative when they trade below.
What Is Crypto Futures Basis?
Basis is the difference between a crypto futures price and the spot price of the same asset. You find it by subtracting spot from futures, so futures above spot give positive basis and futures below spot give negative basis.
How Does Basis Move?
Basis changes with demand, leverage, and time to expiry. As a dated contract gets closer to expiry, its price usually moves toward spot, so basis narrows. Basis can stay positive or negative for long periods.
Traders annualize basis to compare contracts with different expirations.
How Do Traders Use Basis?
Market participants watch basis to gauge sentiment and compare futures with spot. A positive basis usually shows stronger demand for long futures exposure.
- Compare basis across contracts with different expirations.
- Note whether futures trade above or below spot.
- Watch whether the gap is widening or narrowing.
What Are the Main Risks?
Basis positions face liquidation risk when leverage is high and the spread moves against the position. They also face exchange and execution risk if a platform fails or the market is thin, and dated futures add rollover risk.
Basis vs Funding Rate
Basis is a price difference, not a payment. Funding is a recurring transfer between long and short holders of a perpetual swap, and it applies only to perpetual swaps, which have no expiry.
Frequently asked questions
No. Funding is a payment between traders in a perpetual swap; basis is a price gap from futures quotes.
Yes. Negative basis happens when the futures price sits below spot, often when spot demand is strong.
It turns the current gap into a yearly percentage so you can compare contracts that expire on different dates.
No. Tax basis is what you paid for an asset, used to figure a gain or loss. It is unrelated to futures pricing.
