Bitcoin Futures Outperform Treasuries, Driving Wall Street ETF Surge

A new trend has emerged in the cryptocurrency market as Bitcoin futures carry trades are quietly beating US Treasury yields. According to an analysis by Marc Baumann, the annualized basis of Bitcoin futures is near 3%, while the two-year Treasury yield is at 3.8%. This means that investors who buy Bitcoin and simultaneously sell short futures contracts are earning a premium of around 7.89% over the government debt benchmark.

The trend was first observed on August 7, when the CME settlement bulletin showed three gross annualized readings above the same day's Treasury yield. The highest reading was 7.89%, followed by September at 6.25% and December at 5.69%. This is significant because it means that investors are willing to pay a premium for Bitcoin over government debt, even as the market price of Bitcoin remains relatively stable.

The trend has also been reflected in the recent surge of US spot Bitcoin ETFs, which recorded $853.54 million of net inflows in the week ended August 7. This is a significant increase from previous weeks and suggests that more investors are buying into Bitcoin through these funds.