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 bond yields can make bonds more attractive to investors, potentially leading to a decrease in bitcoin's value. As Diana Pires, chief business officer at sFOX, noted, 'As long as yields remain attractive and the Fed's monetary policy stays tight, capital has a real alternative to risk, pressuring assets like crypto.' Bitcoin is already under pressure, trading at $75,670, down 2% over 24 hours, while the Dollar Index hovers above 99. Rising bond yields typically hurt risk assets like bitcoin, as they offer a relatively safe return, making non-yielding assets less appealing.
Experts, including Vikram Subburaj, CEO of Giottus exchange, agree that 'rising Treasury yields and a stronger dollar have historically pressured crypto valuations by tightening financial conditions.' The increase in bond yields is not limited to the US, with the UK and other parts of the world also experiencing rising yields. The Federal Reserve's decision to leave rates unchanged, combined with internal dissent, has pushed up expectations for higher-for-longer interest rates, contributing to the surge in bond yields. As Matt Mena, senior crypto research strategist at 21shares, stated, 'The Fed's decision to keep rates steady was not the shocker, but those three dissenters calling for a strike on any easing guidance threw a bucket of ice on the market's pivot party.' The current economic landscape, including elevated oil prices and rising inflation expectations, is likely to continue putting pressure on bitcoin's value.