Trade the spread, not the market
Pairs trading is how you express a view like βETH will outperform BTCβ without betting on the whole market. This tool shows that only the difference between the two legs drives your PnL, after fees on both. Hedge a single position instead with the hedge calculator.
Trading the gap between two coins
A pairs trade goes long one asset and short a correlated other, betting on their spread rather than the market's direction. Long ETH / short BTC in equal dollar sizes profits if ETH outperforms β whether both pump, both dump, or nothing happens. Direction cancels; relative performance remains.
The sizing detail that breaks beginners: equal dollar legs, not equal coin counts, and ideally volatility-adjusted β if ETH moves 1.4Γ as much as BTC daily, a truly neutral pair shorts $1.40 of BTC per $1.00 of ETH long... or sizes the ETH leg down. Unbalanced legs turn the "market-neutral" trade into a stealth directional bet, which is how people discover their hedge wasn't one during a crash.
Cost reality: two positions mean two spreads, two sets of fees, and β on perps β two funding rates, which sometimes both charge you. The spread you're harvesting needs to exceed that combined drag; pairs whose divergence oscillates less than 3β4% rarely clear costs after all four tolls are paid.