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Holding perpetual futures vs spot long term costs more in funding
The finding
Holding a long ETH contract on Bybit costs 6.68% per year in funding fees alone while holding spot ETH costs zero ongoing funding.
Every 8 hours, long perpetual positions pay short positions when funding is positive.
For long holding horizons, accumulated funding payments exceed the initial spot trading fee gap.
Perpetual futures vs spot holding costs
Trading perpetual futures involves ongoing operational costs that do not exist when holding spot assets. Spot trades incur a one-time execution fee upon buying and selling. Once acquired, holding spot tokens on an exchange carries a daily maintenance cost of zero.
Perpetual contracts use a funding rate mechanism to anchor contract prices to index spot prices. When market demand pushes perpetual contract prices above the spot index, funding rates become positive. Long position holders must pay this rate directly to short position holders every eight hours.
| Asset | Venue | 8h Funding Rate | Daily Funding Cost | Annualised Cost |
|---|---|---|---|---|
| BTC | Bitget | +0.0035% | 0.0105% | 3.83% |
| BTC | Bybit | +0.0064% | 0.0192% | 7.01% |
| ETH | Bitget | +0.0009% | 0.0027% | 0.99% |
| ETH | Bybit | +0.0061% | 0.0183% | 6.68% |
| ZEC | OKX | +0.0077% | 0.0231% | 8.43% |
| ZEC | MEXC | +0.0100% | 0.0300% | 10.95% |
| SOL | Bitget | -0.0049% | -0.0147% | -5.37% |
| SOL | Bybit | +0.0038% | 0.0114% | 4.16% |
The funding spread between venues creates drastic differences in long-term holding drag. On Bybit, an ETH long pays 0.0061% every eight hours, amounting to 0.0183% daily. On Bitget, the same ETH long pays 0.0009% per eight hours, or 0.0027% daily. The spread between Bitget and Bybit for ETH is 0.0052 percentage points per eight hours.
Worth knowing
Holding negative funding assets pays the long position. Holding SOL long on Bitget earns 0.0049% every eight hours because short positions pay longs when funding is negative.
The fee crossover timeline
Perpetual contracts display lower initial taker fees than spot markets across major exchanges. Exchange fee schedules set futures execution costs lower than spot trading costs to incentivize volume.
| Exchange | Spot Maker Fee | Spot Taker Fee | Futures Maker Fee | Futures Taker Fee |
|---|---|---|---|---|
| Bitget | 0.10% | 0.10% | 0.02% | 0.03% |
| Bybit | 0.10% | 0.10% | 0.02% | 0.055% |
| MEXC | 0.00% | 0.05% | 0.00% | 0.02% |
| OKX | 0.08% | 0.10% | 0.02% | 0.05% |
A trader buying ETH via Bybit taker orders pays 0.10% for spot execution. Buying an ETH perpetual on Bybit pays 0.055% taker fee. The roundtrip cost for entry and exit on spot is 0.20%, while the futures roundtrip cost is 0.11%. Entering the perpetual position saves 0.09% in transaction fees upfront.
However, holding the ETH perpetual position on Bybit incurs a daily funding charge of 0.0183%. Dividing the 0.09% upfront savings by the 0.0183% daily funding charge shows that the initial fee benefit evaporates in 4.91 days. On day five, holding the perpetual contract becomes strictly more expensive than having paid the higher spot trading fee.
For BTC on Bybit, the roundtrip futures taker fee is 0.11% versus 0.20% on spot, saving 0.09%. At a daily funding rate of 0.0192% (0.0064% per 8h), the spot trading fee penalty is fully overtaken by funding costs after 4.68 days.
Where this goes wrong
Extended holding in positive funding regimes causes perpetual positions to suffer steady capital depletion regardless of underlying asset price movement.
Liquidation mechanics create a floor spot does not have
Spot trading carries zero liquidation risk. A spot asset can lose 90% of its market value, but the underlying quantity of tokens held remains unchanged. The position remains open indefinitely until sold.
Perpetual futures require margin collateral. If market prices move against a open position, the account margin ratio declines toward the maintenance margin threshold. When the margin balance falls below the maintenance threshold, the risk engine liquidates the contract.
If a trader opens a 10x leveraged long position, a price drop of 10% wipes out the initial margin balance entirely. Even at 1x leverage with isolated margin, maintaining a long position in a severe drawdown exposes the asset to forced closure during market spikes below the collateral balance. Spot holdings carry no maintenance margin threshold and cannot be forcibly closed by exchange liquidators.
What to do instead
Move position holdings to spot markets whenever intended holding duration exceeds one week and funding rates remain positive.
Evaluating asset-specific rate dynamics
Rate structures vary widely across specific assets and venues based on open interest imbalances.
| Token | Cheapest Venue to Hold Long | 8h Lowest Funding | 8h Highest Funding | Funding Rate Spread | 24h Trading Volume |
|---|---|---|---|---|---|
| BTC | Bitget | +0.0035% | +0.0064% (Bybit) | 0.0029% | $5,396,679,638 |
| ETH | Bitget | +0.0009% | +0.0061% (Bybit) | 0.0052% | $4,775,555,224 |
| ZEC | OKX | +0.0077% | +0.0100% (MEXC) | 0.0023% | $1,985,851,174 |
| SNDK | Bybit | +0.0000% | +0.0103% (Bitget) | 0.0103% | $1,812,145,503 |
| SOXL | Bybit | +0.0000% | +0.0000% (OKX) | 0.0000% | $1,550,512,375 |
| SOL | Bitget | -0.0049% | +0.0038% (Bybit) | 0.0087% | $657,745,711 |
SNDK shows a funding spread of 0.0103% per eight hours between venues. Holding long SNDK on Bitget costs 0.0103% per interval (0.0309% daily), whereas holding it on Bybit or OKX incurs 0.0000% funding cost. Holding long SNDK on Bitget for 30 days costs 0.927% in funding alone.
SOXL displays 0.0000% funding across all listed exchanges, generating zero holding drag across all venues.
For SOL, Bitget charges a negative rate of -0.0049% per eight hours, meaning long positions receive payments from short positions. Bybit charges +0.0038% per eight hours on SOL longs. A long SOL trade held for 30 days on Bybit pays 0.342% in funding, while the same trade held on Bitget collects 0.441% in payments.
How long can you hold a perpetual futures position?
Perpetual futures contracts have no expiration date and can be held indefinitely as long as your margin balance stays above the maintenance margin requirement. However, holding a long position during periods of positive funding incurs payments every eight hours that reduce account collateral over time.
Why are perpetual futures trading fees lower than spot fees?
Exchanges set lower fee rates for perpetual contracts to encourage high-frequency trading volume and maintain deep liquidity on derivative order books. While initial futures trading fees are lower, ongoing funding payments often make holding perpetual contracts more expensive than spot over long time horizons.
What happens to funding payments when holding spot crypto?
Spot assets do not participate in funding rate payments or receipts. When you buy spot tokens, you own the asset directly without margin mechanics, eliminating both funding fees and exchange liquidation risks.