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Falling Bitcoin-Ether Spread is Music to Altcoin Traders' Ears
The funding rate spread has collapsed, indicating increased appetite by traders to speculate further out on the risk curve.
Updated Feb 28, 2024, 8:28 p.m. Published Feb 28, 2024, 7:37 a.m.
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- The spread between perpetual funding rates in bitcoin and ether markets recently collapsed, indicating an uptick in investors’ risk appetite.
- The development suggests continued outperformance of alternative cryptocurrencies ahead.
Crypto bulls questioning the sustainability of recent sharp gains in alternative cryptocurrencies (altcoins), including meme coins, may consider the latest trend in the spread between bitcoin and ether perpetual funding rates.
Data tracked by Glassnode show that the spread recently collapsed to an annualized level of - 9%, a sign investors are willing to pay more to take leveraged long or bullish bets in the ether perpetual futures market compared to bitcoin . In other words, risk appetite is rising – investors are willing to pour money into smaller and risky altcoins, expecting to generate a large profit.
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“The spread between BTC and ETH funding rates is widening. Prior to October-2023, a relatively neutral regime can be observed, where the spread oscillated between positive and negative state,” Glassnode said in the weekly newsletter.
"However, since the October rally, funding rates for ETH have been consistently higher than for BTC, inferring an increased appetite by traders to speculate further out on the risk curve,” Glassnode added.
Bitcoin is the world’s largest cryptocurrency by market value and the most liquid, with growing mainstream adoption. Ether, meanwhile, is considered a relatively high beta and an altcoin leader. Thus, the price or funding rate differential in bitcoin and ether markets reflects the broader risk sentiment as the AUD/JPY pair does in traditional markets.
Perpetuals or futures without expiry include a funding rate mechanism so that prices for perpetuals closely follow spot prices. A positive funding rate means leverage is skewed to the bullish side, and long position holders are willing to pay shorts to keep their bets open. A negative rate suggests otherwise.
The bitcoin-ether funding rate spread hovered between -3% (lower bound) and +3% (upper bound) in the first nine months of 2023. Since October, the spread has seen several brief drops below -3%, signaling a bias for ether and the wider altcoin market.
The latest decline comes as ether and other altcoins lead the total crypto market capitalization higher. Bitcoin’s share in the total market often called the dominance rate, has remained between 51% and 54% since early January, according to charting platform TradingView. The total crypto market capitalization has increased from roughly $1.7 trillion to $2.2 trillion during that period.
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KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
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Gold tops $5,000 as bitcoin stalls near $87,000 in widening macro-crypto split: Asia Morning Briefing
Bitcoin’s onchain data points to supply overhang and weak participation, while gold’s breakout is priced by markets as a durable macro regime shift.
What to know:
- Gold’s surge above $5,000 an ounce is increasingly seen as a durable regime shift, with investors treating the metal as a persistent hedge against geopolitical risk, central bank demand and a weaker dollar.
- Bitcoin is stuck near $87,000 in a low-conviction market, as on-chain data show older holders selling into rallies, newer buyers absorbing losses and a heavy supply overhang capping moves toward $100,000.
- Derivatives and prediction markets point to continued consolidation in bitcoin and sustained strength in gold, with thin futures volumes, subdued leverage and weak demand for higher-beta crypto assets like ether reinforcing the cautious tone.
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