6% Treasury Yield Could Be a Silver Lining for Bitcoin

Analysts predict that the U.S. 10-year Treasury yield could reach 6% in the coming months, a level last seen in 2000.

This could potentially be good news for Bitcoin if the rise is driven by concerns about public debt rather than rapid Fed rate hikes, according to Markus Thielen, founder of 10x Research.

Rising Treasury yields increase borrowing costs across the U.S. economy, but for Bitcoin, the same move can have two different causes: the Fed tightening monetary policy or investors demanding higher yields due to concerns about the U.S. fiscal position.

Thielen notes that when investors tie up their money in bonds for a long time, they want additional compensation for uncertainties such as inflation and future government borrowing.

In 2022, during the Fed's rapid rate hikes, the 10-year Treasury yield more than doubled to 3.88%, while Bitcoin lost 64% of its value that year.