The yield on the 30-year US Treasury note has reached 5%, a level only seen twice in the past two decades, prompting concerns among crypto analysts. This surge in bond yields is attributed to a combination of factors, including elevated oil prices, rising long-term inflation expectations, and a hawkish stance within the Federal Reserve. As a result, bitcoin, the world's largest cryptocurrency, is facing downward pressure, trading at $75,670, down 2% over 24 hours.
The rising yields make bonds more attractive, leading to a potential capital rotation out of non-yielding risk assets like bitcoin. Experts warn that this trend may continue, with the dynamic favoring yield and safety over volatility, ultimately affecting crypto valuations. The US Federal Reserve's decision to maintain interest rates, coupled with internal dissent, has also contributed to the rise in bond yields, signaling a prolonged period of financial tightening.