Can a Trader Profit Solely from the Funding Rate Arbitrage?

Yes, a trader can execute a funding rate arbitrage strategy by simultaneously holding a position in the perpetual swap and an opposite position in the spot market (or a traditional futures contract) to hedge the price risk. The goal is to collect the funding payments while the price difference between the two positions remains stable or the hedge offsets any movement.

This strategy is most profitable when the funding rate is high and predictable.