The yield on the 30-year US Treasury note has surged to 5%, its highest level since July 2025, prompting concern among crypto analysts that rising yields could negatively impact bitcoin. As Holger Zschaeptiz, a prominent macro commentator, noted, this development is likely to be painful for the cryptocurrency market.

The rise in yields makes bonds a more attractive investment, potentially leading to a shift in capital away from riskier assets like bitcoin. With the Federal Reserve maintaining its tight monetary policy and yields remaining high, crypto assets may face continued pressure.

According to Diana Pires, chief business officer at sFOX, “As long as yields remain attractive and the Fed’s monetary policy stays tight, capital has a real alternative to risk, which continues to pressure assets like crypto.” Bitcoin is already feeling the strain, trading down 2% over 24 hours, while the Dollar Index has gained 0.5%. Rising bond yields typically hurt bitcoin and other risk assets because they offer a nearly risk-free return, making them more appealing to investors.

Every dollar invested in bitcoin is a dollar not earning the 5% yield, leading to a tradeoff that often results in capital rotating out of non-yielding risk assets. The 30-year Treasury yield is not the only one on the rise; the 10-year yield, a benchmark for borrowing costs, is also elevated, pointing to financial tightening and increased borrowing costs. This situation is likely to discourage risk-taking in both financial markets and the economy. The internal dissent within the Federal Reserve, with three voting officials pushing back against easing language, has caught markets off guard and pushed up expectations for higher-for-longer interest rates.

As a result, bond yields are rising, and crypto valuations are under pressure. The surge in oil prices, which reached their highest level since 2022, is also lifting inflation expectations and contributing to the increase in bond yields.

With the Fed in no hurry to pivot and inflation not convincingly back to target, the macro backdrop remains a headwind for crypto assets.