PANews reported on January 21 that, according to Bloomberg, a key arbitrage trade in the cryptocurrency derivatives market is crumbling. The "cash-and-carry trade" strategy, which involved buying spot Bitcoin and selling futures to capture the price difference, has seen its annualized return plummet from approximately 17% a year ago to around 4.7% currently, barely covering funding costs, due to a massive influx of funds causing the spread to narrow sharply.

As arbitrage profits shrink, the value of open interest in Bitcoin futures on the Chicago Mercantile Exchange has fallen sharply from its peak and has been overtaken by Binance. This primarily reflects a strategic retreat by large US accounts such as hedge funds. Market maturity has given institutions more tools to express directional views, thus narrowing price spreads between exchanges and naturally squeezing arbitrage opportunities. Market analysts point out that the era of near-risk-free, high-return strategies may be over, and traders are turning to more complex strategies in decentralized markets. CME Group states that institutional investors are diversifying from Bitcoin to other tokens such as Ethereum.