Binance, the renowned blockchain ecosystem powering the world’s largest cryptocurrency exchange by trading volume, has unveiled two significant updates: the launch of the Funding Rate Arbitrage Bot and the full rollout of Spot Copy Trading to all eligible users.
With nearly 120,000 active trading strategies available on its Trading Bots Marketplace, Binance continues to enrich its array of automated trading tools. Among the popular bots are Grid Trading for Spot and Futures, Rebalancing Bots, Auto-Invest, and Dollar-Cost Averaging (DCA).
The Funding Rate Arbitrage Bot marks Binance’s pioneering venture into automating a delta-neutral spot and futures arbitrage strategy. By eliminating the need for manual execution of separate spot and perpetual futures trades, this bot allows traders to earn funding fees effortlessly.
These fees are accrued by opening a perpetual futures position and hedging it with an opposite of equal size on the same symbol in the spot market.
Unlike manual arbitrage strategies, the Arbitrage Bot executes both spot and futures trades simultaneously upon setting the user’s strategy parameters. This integrated approach simplifies trading management, as users no longer need to oversee two separate trade orders across different interfaces.
Additionally, the bot’s strategies are independently managed within users’ trading bot wallet, facilitating easy performance monitoring.
Funding fees play a crucial role in crypto markets, aiding in the alignment of spot and perpetual prices. The Arbitrage Bot offers two deployable strategies:
- Positive Carry: Buying assets on the spot market while shorting the corresponding perpetual futures contract to collect funding fees from a positive funding rate.
- Reverse Carry: Buying assets on the spot market and going long on perpetual contracts to collect funding fees from a negative funding rate.
As per the press release shared with The Crypto Times, the Arbitrage Bot is accessible on the Binance website and is scheduled for release on the Binance App on May 30.
The Chief Technology Officer of Binance, Rohit Wad said, “We believe in giving users more choices and we constantly review community feedback to understand what users want. Our Funding Rate Arbitrage Bot is a simple and effective tool to automate for users who already manually deploy arbitrage strategies.”
He added, “Its user-friendly interface means more users can try new strategies. We continue to build trading tools for our users and we are pleased that the community’s reception to our Spot Copy Trading launch has been very positive with over 700 Lead Traders registrations so far.”
Spot Copy Trading, introduced in response to user demand, was initially launched for Lead Traders in late April. Following its successful implementation, the feature will now be fully available to all eligible users starting May 15, enabling them to follow Lead Traders and replicate their portfolios.
Over 70% of active Lead Traders have achieved positive P&L since joining Spot Copy Trading, despite a highly volatile market where the overall crypto market capitalization fell by 11% in April.
As with any investment, users are reminded of the inherent volatility of digital asset prices and the associated risks. Binance encourages users to exercise caution, conduct thorough research, and seek independent financial advice before making investment decisions.
Also Read: Binance to End XRP Support with USDT Conversion