What Is the Relationship between the Spot Price and the Futures Price of a Cryptocurrency as the Contract Nears Expiration?

As a crypto futures contract approaches its expiration date, its price converges with the spot price of the underlying cryptocurrency. This phenomenon is due to arbitrage, where traders exploit any remaining price difference.

If the futures price is higher than the spot price, traders sell the futures and buy the spot, driving the prices together. At expiration, the futures price should theoretically equal the spot price, removing any basis risk.