Bitcoin futures yields have seen a significant decline, now trailing behind two-year U.S. Treasury yields, a shift that reflects a more mature market landscape.
The yields from bitcoin futures, which previously exceeded 20% during the 2021 bull market, have fallen below those of short-term U.S. Treasuries since February. This substantial decrease indicates a reduction in arbitrage opportunities and a shift in market dynamics.
In the current environment, carry trades involving bitcoin futures yield only around 3%, compared to an average of 3.8% from two-year Treasury notes. This stark contrast marks a notable decline in trading volumes for bitcoin futures, which dropped to slightly over $880 million in July, a significant decrease from February's peak of $1.47 trillion, according to Coinglass.
Traders previously capitalized on price discrepancies between futures and spot prices through these contracts, known as basis. However, data from Glassnode reveals that the three-month futures basis has been lower than that of two-year Treasuries for over five months, indicating a tightening of market inefficiencies and reduced arbitrage opportunities.
