Rising US Treasury Yields: What Does It Mean for Bitcoin and Crypto?
As US Treasury yields surged on Monday while stocks and other risk assets sank, crypto investors are trying to determine the real impact on their portfolios. Under President Donald Trump, aggressive tariffs are reshaping the global economic order – and making Bitcoin traders more wary than ever.
Bitcoin has recovered slightly from its steep drop below $75,000 earlier this week, now hovering near $80,000 – up about 3% in 24 hours. Still, many analysts believe that bigger volatility is ahead as markets adjust to sweeping policy changes from Washington.
Treasury Bonds: Key to Understanding Cryptocurrency Volatility
The yield on the 10-year Treasury note – a key gauge of the US economy – rose sharply earlier in the week. According to macro expert Lynn Alden, the move signals a drop in demand for bonds – often seen as a safe haven in times of uncertainty.
“When investors sell stocks, they no longer feel the need to hold bonds as a hedge, so they sell bonds as well. That puts a double whammy on the market,” said Michael Lebowitz, portfolio manager at RIA Advisors.
Typically, rising yields reflect expectations of stronger economic growth or concerns about inflation. But in the current environment, it could signal the opposite – a sign of a breakdown in global confidence in US bonds, especially as countries hit by US tariffs could retaliate by dumping US sovereign debt.
Is Bitcoin Decoupling From Traditional Assets?
Greg Magadini, head of derivatives at Amberdata, warned that tariffs could be a trigger for inflation, pushing yields even higher. “What if international creditors like China start to protest US policy by stopping buying Treasury bonds? The consequences could be far-reaching.”
Meanwhile, Bitcoin is outperforming tech stocks, especially the “Magnificent Seven” group – which includes big names like Apple, Nvidia and Tesla. As of Monday, 1 BTC was worth about 1,993 shares of the Roundhill Magnificent Seven ETF (MAGS), indicating a significant outperformance of digital assets over tech stocks.
Matthew Sigel, head of digital asset research at VanEck, said that Bitcoin’s lack of significant negative impact from this yield surge is “remarkable,” and could be a sign that BTC is gradually detaching from the traditional macro factors that drove it down in 2022.
Is It Time for Bitcoin to Figure Out Its Own Role?
With BlackRock CEO Larry Fink warning that the market could fall another 20% amid escalating tariffs and tighter monetary policy from central banks, Bitcoin could be emerging as a viable alternative for investors looking for long-term value amid the crisis.
Crypto Twitter has been abuzz with talk of Bitcoin “decoupling” from tech stocks and other risk assets. While it is not yet certain, recent developments are evidence of a more mature Bitcoin – less sensitive to interest rates and ready to become an independent asset in global investment portfolios.