◇ GLOSSARY
Carry trade
Borrowing in a low-yield currency or funding regime and investing in a higher-yield asset — in TradFi, yen-funded risk assets; in crypto, often long spot/short perp to collect positive funding. Unwind when the funding spread flips or liquidity dries up.
Carry trades look like free yield until the funding leg moves. Macro desks borrow yen at low rates and buy equities or EM bonds; crypto funds long spot and short perp when funding is rich. Edge is the spread minus execution, borrow, and tail risk.
Perp carry is the crypto-native version: you are not borrowing yen, but you are short a funding leg that can flip sign when positioning crowds. Basis trades are carry with a hedge; naked carry is a bet the regime persists.
Carry unwinds are violent because they are crowded and levered. When BOJ policy or a risk-off shock hits, every carry holder rushes for the same exit — crypto perps feel it as funding spikes, gaps, and liquidations on the risk leg.