U.S. Treasury Yields Surge, Impacting Cryptocurrency Markets

2 mins mins

Key Points:

Yields on 20- and 30-year U.S. Treasury bonds reach record highs.
Market sees risk-off sentiment affecting cryptocurrency valuation.
Rising yields potentially redirect capital from crypto to safer bonds.

Yields on 20-year and 30-year U.S. Treasury bonds surged on May 22, the highest since November 2023. The increase impacts cryptocurrencies, reflecting global market pressures and potential capital shifts.

U.S. Treasury bonds have experienced a notable rise in yields, with 20-year and 30-year rates reaching new highs. According to market analysts, this spike is driven by weak demand at a U.S. Treasury auction, highlighting a shift among major institutional players including international investors and banks.

U.S. Treasury Yields Hit Record Highs on Weak Auction Demand

As yields rise, risk assets like cryptocurrencies are facing heightened pressure. This shift indicates a move towards risk-off sentiment, as investors reconsider allocations to non-yielding assets such as Bitcoin (BTC) and Ethereum (ETH). Institutional reallocations could result in capital flows away from equities and riskier assets.

“US equity markets are responding to rising yields for the first time since April 9th, with the 10-year Treasury yield now exceeding 4.50%, over 80 basis points higher than pre-Fed Pivot levels.” — Kobeissi Letter, Market Analyst, The Kobeissi Letter

Cryptocurrency Markets React as Investors Seek Stable Assets

Did you know? The last time U.S. Treasury yields experienced a similar rise, major cryptocurrencies saw substantial outflows, echoing today’s markets as investors shift to bonds seeking stability.

Bitcoin (BTC), according to CoinMarketCap, traded at $108,819.69 with a market cap of $2.16 trillion. Over the last 24 hours, its trading volume reached $75.20 billion, a marked increase of 41.60%, reflecting significant market activity. The digital currency maintained a market dominance of 63.26%, with a circulating supply of 19,867,956 against a maximum supply of 21 million.

bitcoin-daily-chart-1065 — Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 22:52 UTC on May 21, 2025. *Source: CoinMarketCap*

Expert insights suggest that the rising yields could trigger more conservative positioning among investors, as history shows that increased bond profitability often corresponds with downturns in risk assets, including cryptocurrencies. Financial analysts continue to monitor this trend closely, noting potential impacts on capital flow patterns.