The 30-year US Treasury yield has reached 5%, a level only seen twice in the past two decades, prompting concerns among crypto analysts. This surge in bond yields is attributed to the Federal Reserve's hawkish stance, elevated oil prices, and rising long-term inflation expectations. As a result, bitcoin, the world's largest cryptocurrency, may face downward pressure. According to experts, rising yields make bonds more attractive, leading to a capital rotation out of non-yielding risk assets like bitcoin.
The strengthening US dollar and rising yields also typically weigh on gold prices. The current economic conditions, including financial tightening and higher borrowing costs, may continue to pose a challenge for crypto valuations. The recent surge in oil prices, which reached their highest level since 2022, has further lifted inflation expectations, contributing to the increase in bond yields. As the Federal Reserve maintains its tight monetary policy, crypto analysts expect the macroeconomic backdrop to remain a headwind for bitcoin and other risk assets.