Bitcoin Survives Bond Shock as Treasury Yield Hits Decade High
The US Treasury yield reached its highest level since 2002 in October, touching 5.34% on Oct. 1, as the Federal Reserve's H.15 release reported.
In response, Bitcoin gained approximately 43% over the third quarter, while Ethereum rose around 71%, trading at mid-$80,000s levels.
The sharp increase in yields, however, had a more significant impact on the financing surrounding cryptocurrency. A 5% yield raises the bar for investors, and Q3 buyers cleared it by investing $6.3 billion in US-traded spot Bitcoin ETFs and about $3 billion in Ethereum ETFs.
Citi raised its 12-month Bitcoin forecast to $113,000 from $82,000, citing stronger crypto activity, ETF inflows, and gradual adviser and brokerage allocations. Despite higher yields staying a headwind, other sources of demand outweighed it in the third quarter.