US Treasury Yield Shock Revalues Crypto Financing

The US Treasury yield touched its highest level since 2002 at 5.34% on October 1, capping a third quarter in which it climbed almost 90 basis points, the largest quarterly rise this century.

BTC gained about 43% over the same three months and Ethereum around 71%, but the yield shock had a significant impact on crypto financing.

The Federal Reserve's H.15 release for October 1 put the 10-year at 5.29%, the 30-year at 5.64%, and the 10-year real yield at 2.93%.

Inflation-adjusted returns on government debt now compete with a coupon-free asset, making it harder for crypto to attract investors who demand higher yields.