Bitcoin Carry Trade Tops Treasury Yields at 7.89%: Will Wall Street Rotate?

The Bitcoin carry trade now pays more than US government debt. On August 7, annualized Chicago Mercantile Exchange (CME) Bitcoin (BTC) futures carry reached 5.69% to 7.89%, well above the 4.19% two-year Treasury yield recorded the same day.

The flip lands at an awkward moment for bonds. Long-term Treasury yields sit at their highest levels since 2007, and forecasters keep raising their estimates.

Bond Forecasters Keep Chasing Yields Higher

A Reuters poll sees calmer bonds ahead. The median forecast puts the 10-year yield at 4.50% in three months and 4.34% in a year. The two-year is seen sliding to 3.80%.

However, the same survey carries a warning. Eighteen of 22 strategists said the 10-year is more likely to overshoot those forecasts than undershoot them.

Their track record explains the caution. In March, the same poll series saw the 10-year near 4.25% a year out. Five months later, it trades above 4.70%.

Meanwhile, the long end is already breaking ranks. The 30-year yield touched 5.27% on Tuesday, its highest since 2007. BeInCrypto covered the 30-year Treasury yield closing at a 2007 high in late July.

Real yields are doing the damage, not inflation bets. In other words, investors want more compensation for US deficits and heavy debt sales.