The yield on the 30-year US Treasury note has surged to 5%, its highest level since July 2025, sparking concerns among crypto analysts. This increase in bond yields is attributed to a combination of factors, including dissent within the Federal Reserve, higher oil prices, and rising long-term inflation expectations. As a result, bitcoin, the world's largest cryptocurrency, is facing downward pressure, trading at $75,670, down 2% over the past 24 hours. The strengthening US dollar, with the Dollar Index hovering above 99, is also contributing to the decline in bitcoin's value.
According to experts, rising bond yields typically hurt risk assets like bitcoin, as they offer a more attractive, almost risk-free return, leading to capital rotation out of non-yielding assets. The 10-year yield, a benchmark for borrowing costs, is also elevated, pointing to financial tightening and disincentivizing risk-taking in financial markets and the economy. The recent surge in oil prices, driven by the potential extension of the blockade of Iranian ports, has further lifted inflation expectations, contributing to the increase in bond yields.
With the Federal Reserve signaling no near-term shift in its monetary policy, the macro backdrop is expected to remain a headwind for crypto assets.