[Analysis: Funding Rate Below SOFR, Bitcoin Basis Trading Becomes Less Attractive] According to BIT analysis, unlike in 2022, during this Bitcoin downturn cycle, crypto hedge funds are finding it increasingly difficult to achieve the relatively stable arbitrage returns they once obtained through spot-futures basis trading. This strategy typically involves buying spot and selling futures to capture the price difference between the two. Previously, after deducting financing costs based on SOFR, this type of unleveraged strategy could achieve annualized returns of 5%–10%. However, with rising interest rates and declining retail participation in futures trading, the associated premiums have continued to narrow. Data also confirms this shift: Bitcoin's annualized funding rate is currently around 2.9%, lower than SOFR's 3.7%, indicating that the funding rate spread relative to SOFR has turned negative since February 2026. This trend can be traced back to February 2025, when retail participation began to decline.