Bond Yields Surge to 2007 Levels, Dragging Bitcoin Down to $84,425

Bitcoin has dropped to $84,425 after shedding 2.06% in value, missing its resistance line at $87,000 and pulling back from a recent high.

The drop is partly due to rising US government bond yields, which have reached 5.11%, their highest level since the 2007 global financial crisis. This increase is attributed not only to inflationary fears but also to the recent interest rate hike by the US Federal Reserve and comments from Fed Governor Michael Barr.

The national debt has exceeded $40 trillion, forcing the government to issue more Treasury debt to cover its budget shortfalls. Meanwhile, artificial intelligence entities are heavily borrowing to fund infrastructure growth costs. This has led to increased competition for investor funds, pushing yields higher.

Historically, a spike in US bond yields has caused two stages of reaction in Bitcoin: a risk-off position where investors sell crypto assets and buy Treasuries, followed by a 3-12 month structural decoupling period. During this time, Bitcoin recovers to higher prices as investors shift capital to the cryptocurrency and gold as a hedge against currency debasement.

The Bitcoin-gold correlation has reached its highest level since 2020 at +0.50. This comes after spot ETF flows cushioned Bitcoin's price, with Monday marking the single largest inflow of $999 million since October 2025.