What Is Basis in Crypto? Futures and Perp Basis Explained

Basis is the difference between the price of a futures contract and the spot price of the same asset. In crypto it is usually quoted as futures price minus spot price, and often expressed as a percentage or an annualized rate. Basis tells you how much extra, or how much less, the market is paying for future exposure.

Key takeaways

• Basis = futures price − spot price. Some sources use the reverse sign, so check the convention.
• Positive basis is called contango; negative basis is called backwardation.
• Dated futures converge to spot at expiry, so their basis shrinks to zero over time.
• Annualized basis makes contracts with different expiries comparable.
• For perpetual futures, the basis is the premium to the index, and it drives funding.

How to calculate basis

There are three common ways to express it:

Measure	Formula
Basis (absolute)	Futures price − spot price
Basis (%)	(Futures − spot) ÷ spot
Annualized basis	Basis % × 365 ÷ days to expiry

The annualized figure is simple (not compounded). It is the number most traders compare with funding APR, lending rates or other yields. See APR vs APY for why that distinction matters.

Worked example

ETH spot is $2,000. A quarterly future with 60 days to expiry trades at $2,030.

• Absolute basis: $2,030 − $2,000 = $30
• Basis %: $30 ÷ $2,000 = 1.5%
• Annualized: 1.5% × 365 ÷ 60 = 9.125%, about 9.1% per year

A trader who buys spot and shorts this future, the cash-and-carry trade, locks in roughly that 1.5% before fees if held to expiry. Try other inputs in the basis calculator.

Contango vs backwardation

State	Basis	Typical meaning
Contango	Futures above spot	Demand for leveraged long exposure; normal in rising or calm markets
Flat	Near zero	Balanced positioning, or close to expiry
Backwardation	Futures below spot	Heavy hedging or short demand; often seen in sharp sell-offs

Crypto futures spend much of their time in contango, because many traders want leveraged long exposure and capital to take the other side is limited. The size of the basis changes with market sentiment.

Why the basis converges

A dated future settles at or near the spot price on its expiry date. If the future still traded above spot just before settlement, traders could buy spot, short the future and collect the gap almost without risk. That arbitrage pressure pulls the two prices together as expiry approaches.

The same basis, measured in days left, gives very different annualized numbers:

Basis %	Days to expiry	Annualized
1.0%	90	4.06%
1.0%	30	12.17%
1.0%	7	52.14%

Short-dated annualized numbers look large, but the absolute amount earned is still only 1%, and fees are paid on the full notional.

Basis in perpetual futures

Perps never expire, so they have no settlement to force convergence. Instead, exchanges measure the premium of the perp price over the index price and feed it into the funding rate:

• Perp above index (positive premium): funding tends to be positive, and longs pay shorts.
• Perp below index (negative premium): funding tends to be negative, and shorts pay longs.

The index is an average of spot prices from several exchanges. For how the index and mark prices are built, see mark price vs index price.

Basis risk

Basis risk is the chance that the basis moves against you before you can close. A cash-and-carry trade held to expiry has a known result, but closing early can lock in a smaller or negative gain if the basis has widened. For perps, the premium can swing quickly, which changes both funding and the entry and exit prices of each leg.

Track the basis live

Compare funding, which reflects the perp basis, on the live funding rates page, or look for spot-perp opportunities on the cash-and-carry strategy page.