Bitcoin Under Pressure as Treasury Yields Climb Above 5%

Bitcoin is facing downward pressure as investors grapple with the implications of climbing U.S. Treasury yields. Total crypto market capitalization has fallen to $2.17 trillion, with capital continuing to drain from digital assets amid fragile economic conditions.

Crypto analyst Benjamin Cowen expects the U.S. 10-year Treasury yield to reclaim the 5% mark soon. His forecast follows the 30-year bond yield reaching 5.28% on July 31, marking its highest level since 2007. Cowen argues that the Federal Open Market Committee cut rates too early in the 2024-2025 period, and that pressure on long-term yields will likely persist. If yields hold above 5%, he says the Fed may eventually need to raise rates again, which would tighten the flow of money into riskier investments including crypto.

The shift toward safer assets was evident last week. U.S.-listed crypto products recorded sharp outflows on Friday as yields climbed. Bitcoin funds lost $265.37 million, while Ethereum funds shed $9.03 million and Ripple funds lost $7.69 million. Hyperliquid was hit harder still, declining $1.83 million. A steeper rate hike could extend the current downturn, which is why traders are watching yields closely. Stablecoin supply has also fallen, dropping roughly $14.27 billion since May 22 when it stood at $321.82 billion.