The 30-year US Treasury yield has surged to 5%, sparking concerns among crypto analysts that bitcoin may face downward pressure. This development, combined with elevated oil prices and rising long-term inflation expectations, is pushing bond yields higher and making them more attractive to investors.
As a result, capital is rotating out of non-yielding risk assets like bitcoin, which is already under pressure alongside a strengthening US dollar. Experts warn that rising Treasury yields and a stronger dollar have historically led to decreased crypto valuations by tightening financial conditions.
The current market sentiment is further complicated by the Federal Reserve's decision to leave interest rates unchanged, coupled with internal dissent among its officials, which has caught markets off guard and pushed up expectations for higher-for-longer interest rates.