The yield on the 30-year US Treasury note has reached a significant milestone, hitting 5% and sparking concerns among crypto analysts. This surge in bond yields is attributed to a combination of factors, including dissent within the Federal Reserve, elevated oil prices, and rising long-term inflation expectations. As a result, bitcoin, the world's largest cryptocurrency, is facing downward pressure, with its value decreasing by 2% over 24 hours.
The strengthening US dollar is also contributing to the decline. According to experts, the dynamic is straightforward: as long as yields remain attractive and the Fed's monetary policy stays tight, capital will seek alternative investments, putting pressure on assets like crypto. The rise in bond yields typically hurts risk assets, including bitcoin, as investors opt for the relatively safe and high-yielding government bonds.
Furthermore, the increase in oil prices is lifting inflation expectations, which in turn is driving bond yields higher. With the Fed showing no signs of easing monetary policy, the macroeconomic environment remains challenging for crypto assets.