Bitcoin’s 157-Day Historic Gap: Does This Metric, Falling Even Below US Treasuries, Signal a Bottom?

The fact that Bitcoin futures yields have remained below US Treasury yields for 157 days is being evaluated as a historical bottom signal in the market.

Futures yields, once a favorite of investors in the cryptocurrency market, have experienced a major decline in recent months, falling behind traditional financial instruments. High gains obtained through the strategy known as carry trade, which exceeded 20% during the 2021 bull market, have now given way to levels around 3%. While this situation causes investors to turn to 2-year US Treasury bonds offering risk-free returns, it indicates that the dynamics in the Bitcoin (BTC) market are changing.

According to Glassnode data, Bitcoin’s basis yield, which expresses the difference between the three-month futures yield and the spot price, has been trending below bond rates continuously since February. The current 3% yield rate is well below the 3.8% level of two-year US Treasury bonds. According to shared data, such a prolonged negative gap was last seen between August 2022 and January 2023.

A New Bottom Signal for Bitcoin?

A similar process in the past resulted in the Bitcoin price reaching its cycle bottom. Analysts state that yields remaining low for such a long time could be a sign of saturation and maturation in the market. Coinglass data also supports this change; in July, futures trading volume fell to $880 million, remaining far below the peak of $1.47 trillion in February.

This narrowing of yields means a reduction in price differences in the market and an increase in liquidity. While the market becomes more efficient with decreasing arbitrage opportunities, it is observed that institutional investors are shifting their capital to safer havens. Although this situation leads to a contraction in volume in the short term, it indicates that the Bitcoin market is settling on a firmer foundation in the long term.