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 bitcoin may face downward pressure. This milestone has been reached only twice in the past two decades.
With bond yields on the rise, investors may favor the relatively safe returns of government bonds over riskier assets like bitcoin. As a result, the world's largest cryptocurrency by market value has already begun to feel the effects, trading at $75,670, down 2% over 24 hours. The Dollar Index has also seen an uptick, hovering above 99 and looking to extend its 0.5% gain from Wednesday.
The rise in bond yields can be attributed to various factors, including the Federal Reserve's decision to keep interest rates steady and the internal dissent among its officials, which has pushed up expectations for higher-for-longer interest rates. Furthermore, the surge in oil prices, which reached their highest level since 2022, has lifted inflation expectations and contributed to the increase in bond yields. According to Diana Pires, chief business officer at sFOX, 'As long as yields remain attractive and the Fed's monetary policy stays tight, capital has a real alternative to risk, which continues to pressure assets like crypto.' The dynamic between bond yields and crypto assets is straightforward: when yields rise, bonds become more attractive, leading to a capital rotation out of non-yielding risk assets like bitcoin. This, in turn, may result in downward pressure on bitcoin and other risk assets.
Vikram Subburaj, CEO of Giottus exchange, noted that 'Rising Treasury yields and a stronger dollar have historically pressured crypto valuations by tightening financial conditions.' The situation is further complicated by the fact that bond yields are not the only factor on the rise; the 10-year yield, which serves as a benchmark for borrowing costs, is also elevated, pointing to financial tightening and disincentivizing risk-taking in both financial markets and the economy. As the market continues to navigate these developments, it remains to be seen how bitcoin and other risk assets will respond to the changing landscape.