The yield on the 30-year US Treasury note has reached 5%, its highest level since July 2025, sparking concerns among crypto analysts. This surge in bond yields is attributed to a combination of factors, including dissent within the Federal Reserve, rising oil prices, and increasing long-term inflation expectations.
As a result, bitcoin, the world's largest cryptocurrency by market value, is facing downward pressure. According to Diana Pires, chief business officer at sFOX, the current dynamic is straightforward: as long as yields remain attractive and the Fed's monetary policy stays tight, capital will seek alternative, lower-risk investments. This shift in investor sentiment is likely to continue pressuring assets like crypto, which rely heavily on liquidity and momentum. The rise in bond yields typically hurts risk assets, such as bitcoin and technology stocks, as they become less attractive compared to the relatively risk-free returns offered by government bonds.
Vikram Subburaj, CEO of Giottus exchange, notes that rising Treasury yields and a stronger dollar have historically led to decreased crypto valuations by tightening financial conditions. The increase in bond yields is not limited to the US, as yields are also rising in the UK and other parts of the world. The Fed's decision to maintain interest rates, combined with the internal dissent among voting officials, has led to expectations of higher interest rates for an extended period.
This, in turn, is driving up bond yields and contributing to the current headwinds faced by bitcoin. The recent oil price surge, which reached its highest level since 2022, is further exacerbating inflation expectations and pushing yields higher. As a result, the macroeconomic backdrop remains a challenge for crypto, with investors favoring yield and safety over volatility.