U.S. Treasury yields rise to one of the highest levels since Bitcoin's inception, with 30-year and 10-year yields fluctuating between 4.5% and 5%, coupled with rising expectations of rate hikes. The high cost of capital leads investors to shift toward fixed income, reducing the attractiveness of risk assets like Bitcoin. Historical experience shows that rising yields are often accompanied by tightening financial conditions, exerting sustained pressure on the crypto market.

The current macro environment is similar to 2022, but the market structure has changed: ETF and institutional holdings have increased, but liquidity now relies more on U.S. dollar interest rates. If yields remain high, risk premiums are unlikely to expand, and capital may continue flowing back into the bond market for several months.
Downside risk: if inflation unexpectedly falls or the economy slows, yields could decline rapidly, leading to a sharp rebound in risk assets. But in the short term, high yields remain a heavy burden on the crypto sector.
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