Understanding Market Neutral Strategies in Cryptocurrency

Market neutral strategies offer an alternative to traditional crypto portfolios by removing directional market risk. By combining a spot purchase with a short position of equal notional value on a perpetual futures contract, investors can neutralize price impact. While the standard funding rate of 0.01% every eight hours yields approximately 11% annually, this figure fluctuates based on leverage demand and can turn negative during market panics. After accounting for deposited margin, the net yield typically settles around 8.8%.