US Treasury yields are rising — What does it mean for Bitcoin price?

Still, the price for each of those government bonds, or the yield traded, will differ depending on the agreement maturity. Lets check out whether Bitcoins and Ethers rate will be impacted by the growing need for U.S. Treasurys.Higher need for federal government bonds leads to lower yieldsIf one believes that inflation will not be restrained anytime quickly, this investor is most likely to seek a higher yield when trading the Treasury. Source: TradingViewThe typical inverse connection between Bitcoin and the U.S. Treasury yield has actually been revoked in the past 10 days, most likely since investors are frantically purchasing government bonds for their safety regardless of the yield being lower than inflation expectations.The S&P 500 index, which determines the U.S. stock market, hit 4,430 on June 16, just 7.6% below its all-time high, which also explains the greater yields.

Still, the cost for each of those government bonds, or the yield traded, will differ depending on the contract maturity. Lets check out whether Bitcoins and Ethers price will be affected by the growing demand for U.S. Treasurys.Higher demand for federal government bonds leads to lower yieldsIf one thinks that inflation will not be restrained anytime quickly, this financier is most likely to look for a greater yield when trading the Treasury. 5-year government bond yield vs. Bitcoin/USD (orange). Source: TradingViewThe typical inverted correlation between Bitcoin and the U.S. Treasury yield has been revoked in the previous 10 days, most likely due to the fact that investors are frantically purchasing federal government bonds for their safety regardless of the yield being lower than inflation expectations.The S&P 500 index, which determines the U.S. stock market, struck 4,430 on June 16, just 7.6% listed below its all-time high, which also explains the greater yields. Data validates that government bond yields are higher than typical due to increased expectations of a recession and economic crisis ahead.This post does not consist of financial investment guidance or suggestions.

As a result, those wagering that Bitcoins current decoupling from the U.S. Treasurys yield inverse correlation will rapidly revert might come out disappointed. Data confirms that government bond yields are higher than typical due to increased expectations of an economic crisis and recession ahead.This article does not include financial investment guidance or suggestions. Every financial investment and trading move involves threat, and readers must perform their own research study when making a choice.
This post is for general information functions and is not planned to be and should not be taken as legal or investment suggestions. The opinions, views, and ideas expressed here are the authors alone and do not necessarily show or represent the views and viewpoints of Cointelegraph.

Other Questions People Ask

What impact do rising US Treasury yields have on Bitcoin price?

Rising US Treasury yields typically indicate a shift in investor sentiment, often leading to a decrease in demand for riskier assets like Bitcoin. As investors flock to the safety of government bonds, the inverse correlation between Bitcoin and Treasury yields may become less predictable. This recent decoupling suggests that Bitcoin's price could be influenced by broader market conditions rather than just Treasury yield movements.

Are Bitcoin and Ethereum prices affected by the demand for US Treasurys?

Yes, the growing demand for US Treasurys can impact Bitcoin and Ethereum prices. As investors prioritize safety and seek higher yields from government bonds, this may lead to reduced interest in cryptocurrencies. The recent trends indicate that while traditional correlations may shift, the overall market sentiment surrounding inflation and economic stability will play a crucial role in determining crypto prices.

How do inflation expectations influence US Treasury yields and Bitcoin price?

Inflation expectations can significantly influence US Treasury yields, which in turn may affect Bitcoin prices. When investors anticipate prolonged inflation, they often seek higher yields from Treasurys, leading to increased bond purchases despite lower yields than inflation rates. This dynamic can create uncertainty in the crypto market, as Bitcoin's traditional role as a hedge against inflation may be challenged by changing investor behaviors.

What does the recent decoupling of Bitcoin from US Treasury yields indicate?

The recent decoupling of Bitcoin from US Treasury yields suggests a shift in market dynamics where traditional correlations may no longer hold. Investors are currently prioritizing safety by purchasing government bonds, even when yields are lower than inflation expectations. This behavior indicates that Bitcoin's price may be influenced more by macroeconomic factors and investor sentiment than by direct yield comparisons.

Should investors be concerned about rising US Treasury yields affecting Bitcoin?

Investors should be aware that rising US Treasury yields can create volatility in the cryptocurrency market, including Bitcoin. The current trend of increased bond purchases for safety could lead to reduced demand for Bitcoin, potentially impacting its price negatively. However, it's essential for investors to conduct thorough research and consider broader economic indicators before making decisions based on yield movements alone.