U.S. 10-Year Yield Above 5% Puts Bitcoin Under Pressure
Rising rates are adding pressure to risky assets, and Bitcoin is feeling it too, while the Fed meeting could help set the tone for the market.
Key Takeaways
- The U.S. 10-year yield rose above 5% on Monday, its highest level in three years.
- Higher rates make Treasury bonds more attractive and put extra pressure on Bitcoin and stocks.
- Bitcoin stayed relatively steady around $77,800, while the upcoming Fed meeting is becoming important for the market.
The U.S. 10-year yield rose above 5% on Monday, its highest level in three years. That is putting extra pressure on the crypto market and stocks, because safe Treasury bonds are suddenly becoming a more attractive alternative to risky investments like Bitcoin.
Rates Make Risk Heavier
The rise in rates means borrowing is getting more expensive for households and companies. Stocks are also becoming less attractive when investors can already get a solid return on government bonds without taking much risk. Analysts see that as a serious test for stock valuations if rates keep climbing.
According to Antony Ghee, head of equity investments at Merrill and Bank of America Private Bank, a sustained break above 5% is the biggest short-term concern for stocks. Higher rates can also raise financing costs for companies, which then feeds into the profits that support stock prices. On top of that, higher government borrowing and AI-related infrastructure debt are adding to pressure on rates this year.
Bitcoin Is Holding Up For Now
Bitcoin was around $77,800 (€67,400) and ended Monday slightly higher overall. So far, the coin has handled the rate increase fairly well, but the logic behind the market is still clear: if Treasury bonds are yielding about 5%, a non-yielding asset like Bitcoin has to work harder to attract capital.
That makes the upcoming Fed meeting especially important. Traders are currently pricing in a high chance of a rate hike. A pause or a softer tone from the Fed could push rates lower and ease pressure on Bitcoin and stocks. A hike with tighter guidance could have the opposite effect.
The broader crypto market also remains sensitive to that back-and-forth between rates and risk. Bitcoin Moves Less With Rates Than Gold previously showed that the coin does not always react one-for-one to higher Treasury yields, even though macro pressure is still being felt in the short term.
Why This Matters for Crypto
For European crypto investors, this is especially relevant because U.S. rates often quickly affect global risk appetite. If safe bonds offer more, that can temporarily slow interest in Bitcoin and other risky assets. The move also shows how strongly macro news still flows through crypto, even when the coin itself barely changes on a given day.
