What is the Funding Fee?

As you’ll notice, BTC finally broke the $10,500 resistance on July 27. Since then, the price continued to skyrocket and set an annual high of $12,000 on August 2. This resulted in high trading price premiums and thus high funding rates. On August 2, Bybit’s BTCUSD contract funding rate peaked to 0.1171%.

What are Perpetual Contracts?

Perpetual contracts are very similar to futures contracts in terms of their profit and loss structures. Before we elaborate on what perpetual contracts are, let us review the basics of spot and futures trading.