The yield on the 30-year US Treasury note has surged to 5%, its highest level since July 2025, sparking concerns among crypto analysts. This increase in bond yields could lead to a decline in bitcoin's value, as investors may opt for the relatively safer and more attractive returns offered by government bonds. The current situation is further complicated by the rise in oil prices, which is contributing to higher long-term inflation expectations and, in turn, pushing bond yields even higher. As a result, bitcoin is facing significant pressure, with its price already down 2% over the past 24 hours.
The strengthening US dollar is also weighing on the cryptocurrency, with the Dollar Index hovering above 99. According to experts, the dynamic is straightforward: as long as bond yields remain attractive and the Federal Reserve's monetary policy stays tight, investors will be drawn to the safety of bonds, putting downward pressure on risk assets like bitcoin.
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 leave interest rates unchanged, combined with the internal dissent among its officials, has led to expectations of higher interest rates for a longer period, further fueling the increase in bond yields. This development has caught markets off guard, with the so-called hawkish dissent being seen as a warning shot aimed at the incoming Fed Chair. The surge in oil prices, which has reached its highest level since 2022, is also contributing to the rise in bond yields, as energy prices at gas stations surge and long-term inflation expectations increase.
Overall, the current macroeconomic backdrop remains a significant headwind for bitcoin and other risk assets, with investors favoring the safety and yields offered by government bonds over the volatility of cryptocurrencies.