Definition. This chart shows the spread between the annualized perpetual futures funding rates of BTC and ETH (magenta), alongside each asset's own annualized funding rate (BTC orange, ETH blue). It measures which of the two majors carries the richer premium for leveraged long exposure.

Technical. Funding rates are annualized and smoothed before the spread is taken:

• Annualized Funding = 8h Funding Rate x 3 x 365, smoothed with a 24-period simple moving average
• Spread = Annualized BTC Funding - Annualized ETH Funding (magenta)

Positive values mean BTC perpetual longs pay a higher annualized premium than ETH longs; negative values mean the reverse.

Interpretation. Funding rates express the cost of holding leveraged long positions in perpetual swaps, so the spread tracks where the demand for leverage is concentrated. A positive spread indicates speculative appetite skewed toward Bitcoin, while a persistently negative spread — ETH funding running above BTC — is characteristic of risk-on phases in which traders rotate into higher-beta exposure. Extremes in either direction flag crowded positioning on one leg and have historically preceded mean reversion, as funding arbitrageurs sell the expensive leg. The spread is also the carry available to a market-neutral relative-value trade that is long the cheap-funding asset and short the rich-funding one.

Notes. Built from the Futures Perpetual Funding Rate for each asset. See also BTC/ETH Futures Open Interest Dominance and BTC vs ETH Perpetual Futures Volume Dominance for how positioning and flow are distributed between the two assets, and Annualized Perpetual Funding vs 3m Rolling Basis for funding in the context of the futures term structure.