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 could hinder bitcoin's performance. This development, combined with a stronger US dollar and rising long-term inflation expectations, is likely to put pressure on the world's largest cryptocurrency by market value.
As bond yields increase, they become more attractive to investors, potentially leading to a shift in capital away from riskier assets like bitcoin. With the US government offering a nearly risk-free return of 5% on its 30-year Treasury bonds, investors may be less inclined to invest in non-yielding assets like bitcoin.
The rise in bond yields is not limited to the US, as yields are also increasing in the UK and other parts of the world. The Federal Reserve's decision to maintain interest rates, coupled with internal dissent among its officials, has contributed to higher expectations for interest rates, which is reflected in the rising bond yields.
The current market conditions, characterized by financial tightening and rising inflation expectations, are likely to continue posing a challenge for bitcoin and other risk assets.