The yield on the 30-year US Treasury note has reached 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, investors are flocking to bonds, which are now seen as a more attractive option, putting downward pressure on bitcoin and other risk assets. According to experts, the dynamic is straightforward: as long as yields remain high and the Fed's monetary policy stays tight, capital will seek alternative, lower-risk investments.
Bitcoin is already feeling the effects, trading at $75,670, down 2% over 24 hours, while the Dollar Index hovers above 99. The rise in bond yields typically hurts bitcoin and other risk assets, as investors opt for the relatively risk-free return of 5% offered by the 30-year Treasury. This capital rotation out of non-yielding risk assets is expected to continue, weighing on crypto valuations and tightening financial conditions. The situation is further complicated by the internal dissent within the Fed, with three voting officials pushing back against easing language, leading to expectations of higher-for-longer interest rates.
The oil price surge, which reached its highest level since 2022, is also contributing to the rise in inflation expectations, pushing yields higher. As one expert noted, the macro backdrop remains a headwind for crypto, with flows favoring yield and safety over volatility.