Bitcoin Holds Ground as US Treasury Yields Soar to Decades-High Levels

Bitcoin has held its ground near $84,000 despite a sharp increase in US Treasury yields to their highest level since 2007. The benchmark 10-year Treasury yield climbed to 5.22%, while the 30-year yield reached a fresh 22-year high of 5.5185% before trading around 5.511%. This surge has raised borrowing costs throughout the financial system and increased the hurdle for risk assets.

Camran Khosravi, an analyst at Bitwise, noted that Bitcoin has gained about 22% since Aug. 19 even as the 10-year real yield climbed 50 basis points. James Lavish, co-managing partner of Bitcoin Opportunity Fund, said a $44 billion sale of seven-year notes Thursday cleared at 5.085%, up sharply from 4.512% in August and the highest auction yield since April 1993.

The surge in long-term Treasury yields has yet to produce a comparable expansion in crypto volatility, with Bitcoin remaining inside its recent range while 30-day implied volatility stayed near the lower end of its recent range. Jurrien Timmer, director of global macro at Fidelity Investments, said a 5% 10-year yield provides bond investors with a substantial cushion, but also raises Bitcoin's opportunity cost due to its lack of coupon or dividend payments.