The 30-year US Treasury yield has surged to 5%, a level only reached twice in the past two decades, prompting concerns among crypto analysts. This increase in yield makes bonds a more attractive investment, potentially leading to a capital rotation out of risk assets like bitcoin. As a result, bitcoin's value may be pressured, particularly with the Dollar Index also on the rise. Experts attribute the rising bond yields to the Federal Reserve's decision to maintain interest rates, combined with elevated oil prices and rising inflation expectations.
The surge in oil prices, which reached their highest level since 2022, has also contributed to increased long-term inflation expectations, further driving up bond yields. According to analysts, the current market conditions, characterized by rising yields and a strong dollar, have historically led to decreased crypto valuations. The 10-year yield, a benchmark for borrowing costs, is also elevated, indicating financial tightening and making borrowing more expensive.
This situation may discourage risk-taking in both financial markets and the economy. The Federal Reserve's decision to keep interest rates steady, coupled with internal dissent among voting officials, has led to expectations of higher interest rates for a longer period, contributing to the increase in bond yields.
As a result, the macroeconomic backdrop remains challenging for crypto assets like bitcoin.