The yield on the 30-year US Treasury note has surged to 5%, a level only reached twice in the past two decades, prompting concerns among crypto analysts. This increase, combined with a stronger dollar, may lead to a decline in bitcoin's value. As Holger Zschaeptiz, a prominent macro commentator, noted, the current dynamic favors yields over risk assets. Diana Pires, chief business officer at sFOX, explained that as long as yields remain attractive, capital will seek alternative investments, putting pressure on assets like crypto.
The rise in bond yields is attributed to various factors, including the Federal Reserve's decision to maintain interest rates and the recent surge in oil prices, which has lifted inflation expectations. According to Vikram Subburaj, CEO of Giottus exchange, rising Treasury yields and a stronger dollar have historically led to lower crypto valuations. The situation is further complicated by the internal dissent within the Federal Reserve, with three voting officials pushing back against easing language, leading to expectations of higher interest rates. As a result, bitcoin is facing a challenging macro environment, with its value already under pressure.