Rising US Real Yields Pressure Bitcoin

U.S. Treasury yields are a global benchmark for borrowing costs and asset valuations, while Treasury Inflation-Protected Securities, or TIPS, help separate nominal yields into real rates and expected inflation. That distinction matters for Bitcoin: when inflation-adjusted returns on government debt rise, investors can earn more from comparatively safe assets, increasing the opportunity cost of holding cryptocurrencies that generate no income. A real-yield-led Treasury selloff therefore tightens financial conditions even without a fresh surge in long-term inflation expectations.

On July 31, the benchmark 10-year Treasury yield jumped nearly 7 basis points to 4.731%. The 10-year TIPS yield had reached 2.43% on July 24, indicating that much of the recent rise in nominal yields reflected higher real returns rather than a widening inflation premium. The Federal Reserve left its target range unchanged at 3.50%-3.75% on July 29, but markets raised bets on a future increase, adding pressure on Bitcoin and other non-yielding assets.