The Term Structure of Crypto Futures
Futures across different expiries form a curve. Its shape describes the market’s cost of leverage and how it expects that cost to evolve.
A single futures contract shows the basis for one horizon. Lining up contracts by expiry — weekly, monthly, quarterly — reveals a curve. Expressing each point as annualized basis makes the curve comparable across maturities and over time.
Reading the shape
- Upward-sloping contango: longer-dated contracts trade at higher annualized premiums, typical when demand for leveraged long exposure is persistent.
- Flat: little difference in the cost of leverage across horizons.
- Inverted or backwardated: near-dated contracts trade below spot or below later contracts, often during sharp sell-offs or heavy hedging.
The front end of the curve responds quickly to immediate positioning, while the back end reflects slower-moving expectations and the cost of term capital. A steepening curve indicates that premiums for longer horizons are rising relative to the near term.
Combined with perpetual funding, the term structure gives a fuller view of leverage demand than any single rate — and highlights when the two disagree.
This publication is provided for informational purposes only and does not constitute investment, legal, or tax advice, or an offer or solicitation to buy or sell any asset. Live figures are computed from third-party public market data and may be delayed, incomplete, or inaccurate.
