Arbitrage Opportunity Shrinks as Funding Rate Decreases, Whale Withdraws $11 Million from Hedge Position

BlockBeats News, August 4th, according to TradingBeats (formerly Hyperinsight) monitoring, a whale starting with 0xf17 began synchronously selling off HYPE spot today and buying to close an equivalent perpetual short position, planning to continue unwinding their basis trading position.

The address previously held HYPE spot and contract short positions in close to a 1:1 ratio, earning positive funding fees through price hedging. Based on a position reduction of approximately 146,800 tokens before the unwind, both legs have now decreased to about 107,900 tokens, each reducing by nearly 39,000 tokens, a decrease of around 26.5%.

Currently, two sets of TWAP orders are still being executed to handle a total of 90,000 HYPE tokens:

- Approximately 33,200 tokens have been sold on the spot side, with a trading volume of about $1.8 million;

- Approximately 33,100 tokens have been covered on the contract side, with a trading volume of about $1.795 million.

Adding to the completed orders earlier, the whale's current round of contract short positions has been reduced by about 39,000 tokens, with the current nominal values of spot and short positions each around $5.87 million, a total size of both legs of approximately $11.74 million, reduced by about $4.24 million from before the unwind.

At the unwinding moment of the whale, the HYPE basis trading yield has also fallen from its peak. According to daily statistics: the cumulative funding rate of HYPE has dropped from +0.02790% on August 1st to +0.02227% on August 3rd, a decrease of about 20.2%;

In the last 4 hours: the cumulative funding rate has also decreased by 19.1% compared to the previous 4 hours. Based on the current short position size, the daily gross funding fee income has dropped from about $1638 to $1308.

On a weekly basis: from July 28th to August 3rd, the cumulative rate was about +0.17803%, 16.9% lower than the peak week of July 14th to 20th with +0.21425%.

The HYPE funding rate is currently reported at +0.0013%, with an expected annualized yield of about 10.9%.