Arthur Hayes Says ENA Has More Upside as Basis Trade Shows Revival Signs

Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, has signaled renewed optimism for Ethena’s ENA token, pointing to early indicators that the basis trade is regaining traction. In a post on X, Hayes noted that over-the-counter (OTC) brokers have begun reaching out about dollar borrowing, a development he interprets as a sign that the basis trade is becoming active again, though he acknowledged that rates remain too low for now.

What Is the Basis Trade and Why Does It Matter?

The basis trade is a market-neutral strategy that profits from the price difference between spot markets and futures contracts. Traders typically buy the underlying asset while simultaneously selling futures, locking in a spread. For Ethena, this strategy is integral to its yield-bearing token, sUSDe, which uses hedged positions to generate returns. When basis trade activity picks up, demand for ENA often follows, as the token is used in the protocol’s incentive structures.

Hayes’ comments come at a time when the broader crypto market is seeing renewed interest in yield-generation strategies. The basis trade, which was highly popular in 2024, had cooled as funding rates compressed. Now, with OTC desks showing renewed interest in dollar borrowing, Hayes suggests the foundation is being laid for a resurgence.

Hayes’ Track Record with ENA

This is not the first time Hayes has publicly backed ENA. His family office, Maelstrom, previously invested in the token, and he has been a vocal advocate for Ethena’s approach to synthetic dollars. In his latest post, he reiterated that ENA still has “significant upside,” a statement that carries weight given his early involvement in the project.

However, Hayes also cautioned that the current funding rates are not yet attractive enough to trigger a full-scale revival. He described the OTC outreach as a “positive sign” but stopped short of declaring the trade fully active. This nuance suggests that while the groundwork is being laid, market conditions need to improve further for the basis trade to return to its former volume.

Why This Matters for ENA Holders and DeFi Investors

For investors, the basis trade’s revival could directly impact ENA’s price dynamics. Increased basis trade activity typically leads to higher demand for the token, as it is needed for collateral and incentive programs within the Ethena protocol. Additionally, a healthy basis trade market signals robust derivatives activity, which can attract institutional participation.

For the broader DeFi ecosystem, Hayes’ observations are a bellwether. OTC desks are often early indicators of institutional appetite. If they are proactively seeking dollar borrowing, it suggests that leveraged players are preparing for opportunities. This could be a precursor to increased volatility and trading volume across major crypto assets.

Conclusion

Arthur Hayes’ latest comments on ENA reflect a cautiously optimistic outlook. While the basis trade is not yet fully revived, the early signals from OTC desks are encouraging. For ENA, the potential for renewed basis trade activity could provide a meaningful tailwind, especially if funding rates improve. As always, investors should monitor market conditions closely, as Hayes himself acknowledges that rates remain too low for a full-scale comeback.

FAQs

Q1: What is the basis trade in cryptocurrency?
The basis trade involves buying an asset in the spot market while simultaneously selling futures contracts to profit from the price difference. In crypto, it’s often used to generate yields on stablecoins or tokens like ENA.

Q2: How does the basis trade affect ENA’s price?
Increased basis trade activity typically boosts demand for ENA, as the token is used in Ethena’s incentive structures and as collateral. Higher demand can lead to price appreciation.

Q3: What did Arthur Hayes say about ENA’s upside?
Hayes stated that ENA still has “significant upside” and that OTC brokers reaching out about dollar borrowing is a positive sign for the basis trade’s revival, though he noted rates remain too low.