Bitcoin & Crypto Funding Rates

What are funding rates?

Funding rates are periodic payments between traders holding perpetual futures. A perpetual has no expiry date, so nothing forces its price back to spot the way settlement does for a dated future. Funding does that job: when the perpetual trades above the index price, the rate is positive and longs pay shorts, which makes holding a long more expensive and pulls the price down; when it trades below, the rate turns negative and shorts pay longs.

• Positive funding: longs pay shorts. Demand for leveraged longs is outrunning shorts.
• Negative funding: shorts pay longs. The market is leaning short, often after a sell-off.
• Around +0.01% per 8 hours: the default on most exchanges, from the interest-rate part of the formula alone. It means the market is balanced.

How funding rates are calculated

Most exchanges use the same structure: an interest-rate part, usually 0.03% a day (0.01% per 8-hour period), plus a premium part that measures the gap between the perpetual and the index price, averaged over the period. The result is clamped to a band so funding cannot run away. You pay or receive the rate multiplied by your position’s notional value at each settlement, and only if you hold a position at that moment.

Settles every	Exchanges	+0.01% per period equals
8 hours	Binance, OKX, Bybit, Bitget, Gate.io, MEXC, KuCoin, BingX, HTX	≈ 11% a year
1 hour	Hyperliquid, dYdX, Lighter, Kraken, Crypto.com	≈ 88% a year

Because intervals differ, a raw 1-hour rate looks eight times smaller than the same cost on an 8-hour exchange. Every per-exchange figure on this page is converted to an 8-hour basis and to an annual rate so they line up.

How to read funding rates

• Rising positive funding with rising open interest: longs are piling in with leverage and paying more to stay. Strong while it lasts, fragile when it turns; check open interest.
• Funding spikes while the price stalls: buyers are paying up without moving the price, a common sign of a local top.
• Deeply negative funding after a drop: shorts are crowded. If the price bounces, forced short covering can turn into a squeeze; the long/short ratio shows who is pushing.
• One exchange far from the rest: a local imbalance, and an arbitrage opportunity for traders who can hold both sides.

The history chart shows how this has played out since May 2021: funding ran hottest near cycle tops and turned negative around capitulation.

Funding rate arbitrage and cash and carry

When funding is positive, a trader can buy the coin on spot and short the same amount of the perpetual. The price moves cancel out and the short collects funding: this is the cash-and-carry or basis trade, and the annualised rate is roughly its yield before fees. A second version uses two exchanges: short where funding is highest and long where it is lowest, keeping the difference. The widest spreads panel lists the biggest gaps right now. Rates change every period, can flip sign, and trading and withdrawal fees can wipe out a thin spread, so treat the figures as a starting point rather than a return.

Limits of funding rates

Funding reflects the price of leverage, not the size of positions, so read it with open interest and liquidations. Rates on small or illiquid markets swing wildly and can sit at the exchange’s cap for days. Each exchange uses its own formula and caps, and the open-interest-weighted average leans towards the largest venues.

Where the data comes from

Coinperps collects funding rates for USDT and USD-margined perpetuals from each exchange. The coin rate is the average across exchanges weighted by open interest. The history is one open-interest-weighted reading per day since May 2021. Exchange rates are shown as reported and converted to an 8-hour basis (rate × 8 ÷ the exchange’s interval in hours) and to a yearly rate (8-hour rate × 3 × 365). Tokenised stocks, indices and commodities are left out of the tables.