Bitcoin Faces Highest Treasury Hurdle Since 2007 Amid $22.5B Credit Unwind

The US Treasury yield has reached its highest level since June 2007, crossing 5.3% on August 17. This move is unusual because it's counter to what traders would expect from soft economic data, which usually pushes long yields lower.

This time, however, the 30-year Treasury yield kept climbing despite falling expectations of a September Fed move, now at just 31%. The real yields are near an 18-year high, making inflation-adjusted Treasury returns more competitive with Bitcoin's lack of native yield.

Crypto credit has been unwinding since its peak, reducing the leftover debt that Bitcoin needs to absorb. Collateralized lending is down $22.53 billion from its high in Q3 2025, and Galaxy's data shows a gradual risk reduction mechanism at play this time around, unlike the forced liquidations of 2022.