Bitcoin Carry Trade Surpasses US Treasury Yields for First Time

The Bitcoin carry trade has surpassed US Treasury yields, offering investors a higher return. On August 7, the annualized Chicago Mercantile Exchange (CME) Bitcoin futures carry reached 5.69% to 7.89%, surpassing the 4.19% two-year Treasury yield recorded that day.

Long-term Treasury yields have been rising and forecasters are increasing their estimates. A Reuters poll sees calmer bonds ahead, with a median forecast of 4.50% for the 10-year yield in three months and 4.34% in a year.

The same survey, however, carries a warning that eight out of 22 strategists believe the 10-year Treasury is more likely to overshoot those forecasts than undershoot them. This caution is rooted in their track record, as seen in March when the same poll series saw the 10-year near 4.25% a year out.

The long end of the market has already begun breaking ranks, with the 30-year yield touching 5.27% on Tuesday, its highest since 2007. Real yields are driving the increase, rather than inflation bets.