Bitcoin
BTC
$110,674.25
Bitcoin’s basis trade—profiting from differences between spot and futures prices—has remained subdued in 2025, but a potential Federal Reserve rate cut on Sept. 17 may change that.
CME FedWatch data shows about a 90% probability the Fed will lower the federal funds rate by 25 basis points from its current 4.25%-4.50% range. Analysts say looser monetary policy could spur leveraged positions, increasing futures premiums and reviving the basis trade after a year of inactivity.
The trade typically involves taking opposing positions in spot and futures markets, aiming to capture spreads as they converge near expiry while limiting exposure to BTC price swings.
With rates still above 4%, annualized returns on the trade—around 8%—have been relatively unappealing. A rate cut could make the strategy more attractive than simply holding cash.
CME bitcoin futures open interest has dropped from over 212,000 BTC at the start of the year to roughly 130,000 BTC, according to Glassnode, similar to levels seen during the launch of spot BTC ETFs in January 2024. Annualized basis returns have remained below 10% in 2025, compared with roughly 20% at the end of last year, reflecting tighter funding conditions, slower ETF inflows, 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.
A Fed rate cut could ease liquidity, boost demand for risk assets, and lift CME futures open interest, potentially reigniting the basis trade and bringing renewed institutional activity to BTC markets.
