Bitcoin Holds Near $78,000 as Bond Selloff Drives JGB Yields Higher

Global government bond yields have climbed to their highest levels in decades, lifting returns on lower-risk assets and tightening financial conditions worldwide. That backdrop has weighed on Bitcoin, whose appeal can diminish when investors can earn higher yields without taking cryptocurrency risk. Moves in sovereign debt markets also influence the dollar and broader liquidity, making the expected duration of restrictive monetary policy increasingly important for digital assets.

Bitcoin has remained trapped in a narrow trading range for six consecutive weeks, while market volatility has fallen to a multi-year low as directional conviction fades. Investors are focusing on the Federal Reserve’s minutes from its July 25-26 meeting for clues on the policy outlook. The record could clarify how officials assessed persistent inflation, economic resilience and the need for further rate increases after lifting borrowing costs again in July.

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 yield on Japan’s 10-year government bond has climbed to a 30-year high, reflecting higher funding costs in Japan and potentially driving up borrowing rates through global bond markets. As yields on safe assets rise, so does the opportunity cost of holding non-yielding Bitcoin, making Japanese interest rates an important factor in whether the crypto rally can continue.

Bitcoin has gained 8% this month as expectations of interest-rate cuts by the U.S. Federal Reserve temporarily eased macroeconomic pressure. However, the latest 30-year high in Japan’s 10-year government bond yield has also put pressure on yields across global bond markets. If borrowing costs keep rising, capital could shift toward yield-bearing bonds and weaken Bitcoin’s prospects for further gains.