Fed's Hawkish Hold Crushes Bitcoin ETF Flows Amid Soaring Treasury Yields

The Federal Reserve held interest rates steady at 3.50-3.75% in a 9-3 vote, the most lopsided dissent since September 2016, with three regional presidents pushing for an immediate 25 basis point hike.

This decision sent 30-year Treasury yields to an intraday high of 5.2273%, their steepest level since June 2007, before settling at 5.2039% per Reuters data.

Fed Chair Kevin Warsh acknowledged the yield surge and welcomed it as evidence that markets were doing the tightening work, but declined to validate those moves with a policy commitment.

The increase in interest rates raises the probability of a September rate hike, increasing expected short-end yields, which can reduce demand for non-yielding assets like Bitcoin.