Hedge funds are shorting ETH on CME for basis arbitrage

ChainCatcher news, according to CoinDesk, data from the Commodity Futures Trading Commission (CFTC) shows that hedge funds have shorted $1.73 billion worth of Ethereum on the Chicago Mercantile Exchange (CME), which is favored by institutional traders. CME data also indicates that the net leveraged position in Ethereum is heavily skewed towards short.

It is reported that basis trading refers to shorting a certain asset on one platform while buying it on another to maintain a delta-neutral position against price fluctuations. In this case, traders can achieve an annualized return of about 9.5% by shorting ETH on the CME and buying a spot ETF (currently managing approximately $12 billion in assets).

Additionally, traders shorting ETH can earn an extra annualized return of about 3.5% if they buy spot ETH and stake it. It is worth noting that buyers of the spot ETF cannot choose this method, as Ethereum spot ETFs currently do not support staking services.