GUSD annualized yield hits 3.8%: stablecoins are also getting in on the “on-demand U.S. Treasury bills” craze

Gemini Dollar (GUSD) annualized yield has recently jumped to 3.8%, up 35bp from 3.45% in Q2, setting a 14-month high. The logic behind it is straightforward: more than 84% of the reserves are short U.S. Treasuries maturing within 90 days; with the 3-month U.S. Treasury yield still at 4.5%+ , Gemini shares part of the spread with holders. It also stacks institutional lending against BTC and ETH collateral (LTV 50-60%) plus overnight repo. The money comes in cleanly—it’s not an algorithmic Ponzi scheme.

In comparison, sUSDS, sUSDe, and Syrup USDC have already been trading aggressively in the 3.49%-4.54% range. GUSD cuts into institutional customers with the “NYDFS regulatory oversight + FDIC-member bank custody” card. In Q3, spot BTC ETF net inflows were more than $20 billion, and derivatives venues use stablecoins to top up margin, pushing the utilization rate of the GUSD lending pool from 62% to 78%—the demand is real.

Personally, I’m more bullish on the compliant interest-earning stablecoin line, which also benefits compliant exchanges like COIN. With the U.S. Treasury yield staying high plus crypto making a comeback, the double narrative can run for a while. But risks can’t be ignored: first, if U.S. Treasury rates peak and then fall, 3.8% may not hold; second, stablecoins are not bank deposits—if Gemini itself has issues with redemption or regulation, the peg will shake; third, on the other side of collateralized lending, if BTC or ETH crashes and triggers cascading liquidations, the spread will be the first thing to get eaten. You can treat it like a “crypto version of a money market fund,” but don’t treat it as a zero-risk asset to go all-in. $BTC ‌$ETH ‌