What are crypto funding rates? (and why BTC longs are currently paying) In perpetual futures (the most popular way to trade crypto with leverage), there is no expiry date. To keep the futures price tightly anchored to the real spot price, exchanges use a simple mechanism called the funding rate. Every 8 hours (on most major platforms), one side pays the other: • Positive funding rate → Longs pay shorts • Negative funding rate → Shorts pay longs It’s basically a small interest payment that transfers between traders depending on whether the market is leaning more bullish or bearish. Right now on Bitcoin: Funding is positive across most exchanges (roughly +0.005% to +0.01% every 8 hours). That means longs are paying shorts. Annualized that’s about 5–11% = mild, not extreme. Why it matters: Persistent high positive funding can signal crowded longs and raise the risk of a long squeeze. Very negative funding can signal crowded shorts and fuel short squeezes. For traders holding positions for days or weeks, these small payments add up and become a real cost (or income). At current levels the cost of holding a BTC long is still manageable, but it’s something every leveraged trader should keep an eye on.