Institutional investors are taking advantage of inefficiencies in the crypto futures market to benefit from low-risk exposure to crypto, according to WisdomTree.
Institutional players are deploying basis trading to capitalise on crypto futures trading above the spot price, says Dovile Silenskyte, director of digital assets research at WisdomTree.
She explained that a positive basis – in this case futures trading above spot – implies a contango structure, common in highly speculative environments.
Investors are increasingly buying either spot crypto or a physically backed crypto ETP and shorting crypto futures with the aim of capturing the yield as the futures converge toward spot at expiry.
However, basis trading opportunities vary across cryptocurrencies, Silenskyte added, offering a spectrum of yield and risk characteristics that cater to different investor profiles.
Among the CME futures, which are regulated and centrally cleared, CME Bitcoin futures are the most liquid crypto derivatives and consistently trade at an annualised premium to spot, while CME Ether futures are gaining institutional traction. CME Solana futures are less liquid but can potentially offer higher upside, and CME-listed XRP futures are a tactical, fully onshore option.
“For institutional players managing risk-adjusted returns, CME futures are the clear choice for structured basis strategies,” Silenskyte said. “They offer not only regulatory certainty and central clearing but also more predictable and transparent liquidity profiles, particularly in bitcoin and Ether contracts.”
She added: “In crypto, nearly everyone chases the next 10x token. Few focus on boring, repeatable yield.
“But basis trading – especially using listed, institutional-grade products – is becoming the go-to strategy for hedge funds, family offices, and treasury desks seeking low-risk, non-directional crypto exposure.”
