The yield on the 30-year US Treasury note has reached a two-decade high of 5%, sparking concerns among crypto analysts that rising yields will hinder bitcoin's performance. As bond yields increase, they become more attractive to investors, potentially leading to a capital rotation out of risk assets like bitcoin. This shift is exacerbated by the strengthening US dollar, which has put pressure on crypto valuations. Experts warn that the current financial tightening, characterized by rising borrowing costs and disincentivized risk-taking, will continue to weigh on bitcoin and other risk assets.
The recent surge in oil prices has also lifted inflation expectations, contributing to the upward trend in bond yields. As a result, crypto analysts anticipate that the macroeconomic backdrop will remain a significant headwind for bitcoin in the near term.