Overnight conditions have remained calm. The latest New York Fed SOFR observations available on October 25 put the Treasury-backed borrowing benchmark at 3.9% for October 22, up from 3.88% on October 21. FHLBNY said SOFR stayed at or below the Fed’s 3.9% interest rate on reserve balances during the report’s week.
FHLBNY flags Canadian bank year-end on October 30 and cash leaving repo to pay mortgage-backed-security holders as forthcoming pressures. It says SOFR may test 3.9% more steadily. Calmer Thursday bill auctions than the previous week provide a counterweight to those risks.
Bitcoin’s financing gives a separate reading
Bitcoin’s positioning data show rebuilding leverage. Coinbase Institutional’s October 23 research reported perpetual funding rising from 0.1% annualized on October 13 to 7.2% one week later. Its Prime Trading commentary separately interpreted rebuilding Bitcoin and Ether funding as momentum longs adding exposure. These derivatives payments measure the cost of maintaining leveraged positions, rather than a comparable repo borrowing rate.
For borrowing context, Coinbase’s financing table dated October 22 listed indicative centralized-finance overnight rates of 4.25%–12.5% and a Bitcoin borrowing range of 1.25%–4.75%. Without matched borrower and collateral terms or an earlier comparable quote, those ranges cannot establish a new tightening in credit.
Futures basis, the premium over spot prices, needs similar care. The 2023 BIS paper Crypto carry finds that interest-rate differentials explain little of its variation, emphasizing leveraged investor demand and the relative scarcity of arbitrage capital. Basis therefore needs to be read alongside borrowing conditions and positioning.
A Treasury-to-Bitcoin transmission case would strengthen if repo pressure persisted while comparable crypto borrowing or rollover terms worsened and market depth thinned. Stable crypto financing would weaken that explanation. Even simultaneous deterioration would leave causation to establish: evidence that constrained intermediaries actually reduced financing available to Bitcoin markets remains the missing link.