The yield on the 30-year US Treasury note has surged to 5%, its highest level since July 2025, prompting concerns among crypto analysts that rising yields will hinder bitcoin's performance. This increase in bond yields is attributed to a combination of factors, including dissent within the Federal Reserve, higher oil prices, and growing long-term inflation expectations. As a result, investors may opt for the relatively safe and attractive returns offered by bonds, rather than investing in riskier assets like bitcoin.
The rise in bond yields is also being felt in other markets, with the US Dollar Index gaining and gold prices falling. According to experts, the current economic conditions, characterized by rising Treasury yields and a stronger dollar, have historically led to decreased crypto valuations. The 10-year yield, a benchmark for borrowing costs, is also elevated, pointing to financial tightening and increased borrowing costs.
This environment is likely to continue weighing on bitcoin and other risk assets. The recent surge in oil prices, driven by concerns over supply disruptions, has further fueled inflation expectations and contributed to the increase in bond yields. As the Federal Reserve maintains its tight monetary policy stance, investors are likely to favor yield and safety over volatility, posing a challenge to the crypto market.