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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
d_eddie
on 30/04/2025, 10:45:46 UTC
⭐ Merited by vapourminer (1)

Interesting...exactly what i was talking about, albeit, NOT available in US:

https://www.coinbase.com/blog/coinbase-asset-management-launches-the-coinbase-bitcoin-yield-fund

with 4-8% yearly average yield on bitcoin in BITCOIN, who would ever need to sell?
It's a basis trade fund, using the difference between spot and futures, imho.

Yes. Elsewhere they say it explicitly: all the yield is expected to come from the basis trade

Funny how they tell you the yield is going to be 4% when there is no guarantee that the yield will stay positive in the future. Nothing mechanically prevents it from going negative.

In prose: nothing mechanically prevents the funding rate from going negative. Verifiably true: there have been several stretches of negative funding rates. The carry trade (long corn, short futures) gets disrupted when it happens. I don't think the "inverse carry trade" would work too well (shorting corn and longing futures) to monetize negative funding rates.

However, as I'm sure you know very well, the normal state for bitcoin futures is contango - that is, futures are more expensive than today's corn. In other words, the premium - basically the funding rate - is generally positive, at least when bitcoin is expected to go up.

If it's really "going up forever", as Laura often repeats after some guy told her, the more frequent, normal condition could be profitable. Predicting it to stay in the 4%-8% annualized range is another matter, though.