Bitcoin Stands Firm at $84,000 Amid Historic US Bond Selloff

Bitcoin has resisted a historic US bond selloff that pushed Treasury yields to decades-high levels. The benchmark 10-year Treasury yield climbed to 5.22%, extending a move that took borrowing costs to their highest level since 2007. This surge in interest rates raises the hurdle for risk assets, including Bitcoin, by offering investors yields above 5% on US government debt.

Despite this macro shock, Bitcoin has held steady near $84,000. Analyst Camran Khosravi noted that Bitcoin gained about 22% since August 19 even as the 10-year real yield climbed 50 basis points. This resilience is a testament to Bitcoin's ability to absorb shocks.

However, the pressure on Bitcoin continues to build. With yields now above 5%, the asset's opportunity cost increases. As Jurrien Timmer, director of global macro at Fidelity Investments, pointed out, a 100-basis-point decline in yields could generate an 11.9% return for bond investors.

Traders have responded to the macro shock by slashing $1.7 billion in leverage. This reduction was broad-based, with combined Bitcoin open interest falling to about $10.3 billion on September 25 from $12 billion on September 22.