Bond Market Shock Fails to Break Bitcoin's Back

Bitcoin has absorbed a significant shock from a historic US bond selloff without sustaining major damage. Treasury yields rose to their highest level since 2007, reaching 5.22% for the benchmark 10-year yield and 5.5185% for the 30-year yield.

The surge in yields is putting pressure on risk assets, but Bitcoin has so far maintained its value near $84,000. According to Camran Khosravi, an analyst at Bitwise, Bitcoin has gained about 22% since August 19, even as the 10-year real Treasury yield climbed 50 basis points.

Traders have reduced their leverage by $1.7 billion in response to the bond market shock, but this has not led to a proportional break in spot price. The reduction was broad-based across major exchanges, with Gate.io and Binance recording significant declines in open interest.

The Treasury selloff is adding to concerns about inflation and economic growth, which could keep policymakers committed to restrictive conditions for longer. James Lavish, co-managing partner of Bitcoin Opportunity Fund, noted that the $44 billion sale of seven-year notes cleared at 5.085%, the highest auction yield since April 1993.