The 30-year US Treasury yield has reached 5%, a level only seen twice in the past two decades, prompting concerns among crypto analysts that rising yields will hurt bitcoin. As bond yields increase, they become a more attractive option for investors, potentially leading to a decrease in demand for riskier assets like bitcoin. This shift in investor sentiment is exacerbated by the strengthening US dollar and elevated oil prices, which are contributing to higher long-term inflation expectations. The result is a challenging environment for bitcoin, with prices already under pressure.
According to experts, the dynamic is straightforward: as long as yields remain attractive and monetary policy stays tight, capital will favor safer alternatives, putting pressure on assets like crypto. The rise in bond yields is not limited to the US, with yields also increasing in the UK and other parts of the world. The Federal Reserve's decision to keep interest rates steady, combined with internal dissent among voting officials, has led to expectations of higher interest rates for longer, further supporting the increase in bond yields. As one analyst noted, the Fed's hawkish stance is a warning shot that will keep the market's pivot party on hold, with bitcoin feeling the effects as a classic indicator of risk.