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

August 4th, according to TradingBeats (formerly Hyperinsight) monitoring, the whale starting with address 0xf17 began synchronously selling HYPE spot today and buying to close an equivalent amount of perpetual shorts, planning to continue unwinding the basis trade position.

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

Two sets of ongoing TWAP orders are currently processing 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 used to close shorts on the contract side, with a trading volume of about $1.795 million.

Combined with previously completed orders, the current round of contract short positions has been reduced by approximately 39,000 tokens, with the current nominal values of the spot and short positions at about $5.87 million each, totaling approximately $11.74 million, reduced by around $4.24 million from before the reduction.

At the time of the whale's position adjustment, the HYPE basis trade yield also fell from its peak. According to daily statistics: the cumulative funding rate of HYPE has decreased from +0.02790% on August 1st to +0.02227% on August 3rd, a decline 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 decreased from about $1,638 to $1,308.

Weekly statistics: from July 28th to August 3rd, the cumulative rate was approximately +0.17803%, a 16.9% decrease from the high of +0.21425% from July 14th to 20th.

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