Bitcoin Flows Falter as US 10-Year Yield Tops 4.75%

Long-dated U.S. Treasury yields remain elevated as investors demand greater compensation for inflation, widening fiscal deficits and heavy government debt supply. Higher yields raise corporate discount rates and the opportunity cost of holding non-yielding assets, typically weighing on both equities and cryptocurrencies. Bitcoin’s divergence from a broad Wall Street selloff is therefore notable, though it does not eliminate the macroeconomic pressure facing risk assets.

Relief from the U.S. Treasury’s expanded buyback of older long-term debt lasted only one session. On Aug. 20, long-bond yields rebounded to about 5.2% as oil prices climbed and all three major U.S. stock indexes closed lower. Bitcoin extended its short squeeze on Aug. 21, briefly breaking above $75,000. Analysts attributed much of the rally to the covering of nearly $3 billion in bearish positions, warning that persistently high rates could still force another repricing across risk markets.

The 30-year US Treasury yield is a key benchmark for long-term borrowing and global asset valuations, influencing mortgages, corporate financing and investors’ required returns. Its rise toward levels last seen before the global financial crisis increases the appeal of risk-free government debt and raises the opportunity cost of holding non-yielding assets such as Bitcoin, tightening financial conditions and weighing on risk appetite.

The 30-year yield climbed above 5.2%, its highest level since 2007 and a near 19-year peak. Pressure intensified after three Federal Reserve officials made an unusually coordinated case for higher interest rates, reinforcing expectations that policy could remain restrictive or tighten further. The combination of a Treasury selloff and hawkish Fed signals pushed Bitcoin below the $80,000 threshold as investors cut exposure to risk assets.

The US Treasury yield curve reflects market expectations for the economy and monetary policy. When the two-year yield closes in on the 10-year yield, it indicates that investors expect the Federal Reserve to keep interest rates high for longer. That makes returns on fixed-income assets more attractive and raises the opportunity cost of holding non-yielding risk assets such as bitcoin.

The spread between 10-year and two-year US Treasury yields has continued to narrow recently, reaching its tightest level since April 2025 and leaving the yield curve markedly flatter. The shift signals a hawkish Federal Reserve policy stance. If markets push back their expectations for interest-rate cuts further, the change could curb flows into bitcoin and create a headwind for its recent bull run.

Bitcoin spot ETFs give investors exposure to crypto assets through traditional brokerage accounts, making fund flows an important gauge of institutional demand. Rising U.S. Treasury yields reflect scaled-back expectations for Federal Reserve rate cuts, reducing the appeal of non-yielding, volatile assets.

The latest 2026 data show that Bitcoin spot ETFs recorded $1.47 billion in weekly net outflows, the third-largest weekly withdrawal this year. Bitcoin funds accounted for the bulk of outflows from cryptocurrency investment products, signaling a marked decline in risk appetite as Treasury yields remain high and expectations for rate cuts are pushed back.

U.S. Treasury yields reflect risk-free dollar returns and broader financial conditions. When long-term yields rise, so does the opportunity cost of holding non-yielding assets such as Bitcoin. Crypto firm sFOX and Indian exchange Giottus said the Federal Reserve’s restrictive stance and a stronger dollar could steer capital toward bonds and weigh on crypto valuations.

The U.S. 30-year Treasury yield rose to 5% on April 30, its highest level since July 2025, while Bitcoin fell 2% to $75,670. On May 15, the two- and 10-year yields climbed to 4.05% and 4.5%, respectively. Bitcoin traded at about $81,000, remaining below its 200-day moving average of $82,000. Dogecoin, meanwhile, gained nearly 10% in a week to $0.105. Coinglass data showed its futures open interest reached 15.36 billion coins, a year-to-date high.