The SOFR–EFFR spread remains one of the most useful windows into short-term liquidity conditions. SOFR reflects the cost of secured overnight borrowing against Treasury collateral in the repo market, while EFFR reflects unsecured overnight interbank funding. Under normal conditions, SOFR tends to sit below EFFR because secured borrowing should generally be cheaper than unsecured borrowing. When that relationship flips, and SOFR moves above EFFR, it is often a sign that something is wrong in the funding system. In this week's report, we highlighted that not just the level of the spread, but its stability is also improving. Instead of continuing to make extreme upside moves, it has started to unwind and compress back toward a much narrower range. That does not mean liquidity is fully repaired. It does, however, suggest that the most acute phase of the stress is fading. In other words, the system appears to be moving from disruption toward stabilization. https://bitcoinintelligence.substack.com/p/early-signs-of-stabilization(Sina 🗝️⚡ BI Report)