The digital asset space continues to evolve as institutional participants adopt new methods to manage risk and exploit market inefficiencies. Ripple’s introduction of the RLUSD in late 2024, alongside the recent launch of XRP futures on the Chicago Mercantile Exchange (CME), is driving new opportunities in advanced trading strategies, particularly basis trading.
A recent post by WrathofKahneman (@WKahneman), a well-known member of the XRP community, shed light on how these innovations intersect, particularly through the lens of Hidden Road’s pioneering approach to basis trading.
#APEX: Asked about the interaction between #XRP & #RLUSD, Higgins of Hidden Road said "we're excited to clear the first XRP future on CME."
Why? *
>Hidden Road makes a basis trade where they buy #XRP (spot) and sell XRP futures on CME, locking in the price difference (basis),… pic.twitter.com/3cstfDkwLZ
— WrathofKahneman (@WKahneman) June 12, 2025
Basis Trading Applied to XRP Futures
Basis trading involves taking advantage of the price gap between an asset’s spot price and its futures contract. Traders buy the spot asset while simultaneously selling the futures contract, profiting as the two prices converge over time. This strategy is especially effective when futures trade at a consistent premium, or contango, as seen in many digital asset markets.
CME’s launch of XRP futures provides institutional players with a regulated and capital-efficient way to implement this strategy. The ability to enter and exit trades in a familiar derivatives market allows more precise risk control, especially when tied to a liquid spot market like XRP.
Hidden Road’s Strategy and RLUSD’s Critical Function
In his post, WrathofKahneman detailed how Hidden Road, a prime broker recently acquired by Ripple for $1.25 billion, executed the first XRP futures trade on CME and is employing a classic basis strategy by buying XRP spot and selling XRP futures to lock in the spread.
However, this strategy encounters a timing challenge. CME futures operate only on weekdays, while the XRP spot market is open 24/7. This mismatch exposes traders to weekend risk, where price movements can create margin issues during periods when traditional collateral cannot be posted.
We are on twitter, follow us to connect with us :- @TimesTabloid1
— TimesTabloid (@TimesTabloid1) July 15, 2023
According to WrathofKahneman, RLUSD addresses this risk directly. As a Ripple-issued stablecoin with real-time, on-chain settlement capabilities, RLUSD allows firms like Hidden Road to meet margin requirements even outside CME’s operating hours.
This enhances both capital efficiency and risk management, making it easier to maintain open positions through volatile weekend sessions.
Strengthening XRP’s Institutional Ecosystem
Integrating RLUSD into basis trading strategies marks a significant advancement in the infrastructure supporting XRP markets. It provides institutional players with better tools to manage capital and risk while reinforcing the utility of stablecoins in professional trading environments.
This development also supports broader institutional adoption of XRP. By enabling more robust and resilient trading setups, RLUSD helps bridge the gap between digital asset markets and traditional finance.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
Follow us on X, Facebook, Telegram, and Google News
