BitMEX has reported the collapse of a once-profitable crypto arbitrage strategy due to market saturation. The strategy, which involved exploiting price differences between spot assets and perpetual futures, has seen its yields plummet as automated trading systems flooded the market. By mid-2024, annualized yields from this strategy fell below 4%, lower than U.S. Treasury yields, marking a significant shift from previous returns that exceeded 25% during bull markets. The report highlights that the widespread adoption of this strategy, particularly by projects like Ethena, led to an imbalance in the market, collapsing funding rates across major exchanges. This development signifies a maturation of the cryptocurrency market, aligning it more closely with traditional financial markets in terms of efficiency and reduced arbitrage opportunities. As a result, traders are now exploring alternative strategies, such as cross-exchange arbitrage and new derivative products, to generate returns in this evolving landscape.