Bitcoin Defies Convention as Rising Yields Fail to Deter Price

Rising Treasury yields have long been seen as bearish for risk assets like Bitcoin. However, financial educator Mark Moss disagrees, pointing to the cryptocurrency's resilience against higher interest rates.

The 30-year Treasury yield has surged to a 24-year high of 5.63%, while the 10-year Treasury yield has risen roughly 135 basis points since late 2023. During this time, Bitcoin has approximately doubled in value.

Moss expects the yield curve to steepen as short-term rates fall while longer-term yields stay elevated, potentially supporting bank lending and liquidity. He argues that the traditional framework of higher rates being bad for risk assets is too simplistic.

The 10-year Treasury yield above 5% does not necessarily signal market trouble. Moss suggests that the bond market may be pricing in stronger economic growth, massive investment, and higher productivity. This backdrop could ultimately benefit Bitcoin and recent price action is evidence that investors may be misreading the recent rise in yields.

Moss identifies two potential forces behind higher long-term yields: fiscal pressure from mounting U.S. debt and expectations for stronger economic growth. He favors the latter explanation, pointing to growing investment in AI, infrastructure, and other technologies that boost productivity.