Crypto28 September, 20262 min read
Analysts Say U.S. 10-Year Treasury Yield Could Reach 6% As Bitcoin Bulls Reassess
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Analysts expect the 10-year Treasury yield to reach 6% due to deficits and debt growth. Rising yields could attract funds away from government debt, potentially benefiting Bitcoin.
Yield fears, bitcoin response
Analysts said the U.S. 10-year Treasury yield has been climbing for months and could be headed toward 6%, a level not seen since 2000.
Markus Thielen, founder of 10x Research, said in a client note on Tuesday that “When yields rise because the Fed is tightening policy, bitcoin suffers.”
Thielen also forecast a rise in the 10-year yield to 6% in the coming months, while CoinDesk said the impact on bitcoin depends on what is driving the yield increases.
The 10-year yield more than doubled to 3.88% in 2022 as the Fed raised rates aggressively, and bitcoin fell 64% that year.
Fiscal-driven rises vs Fed
Thielen said the situation reverses when yields rise due to fiscal concerns and term premia, arguing that investors seeking higher yields because they are worried about record deficits is a “vote of distrust in the U.S. government’s finances.” Since late 2023 the 10-year yield has climbed 135 basis points to 5.23%, while bitcoin has roughly doubled to about $86,000 even after retreating from its October high above $126,000.
Strategic Analytics, based in Chicago, said in a LinkedIn post that “Since 2022, gold has increasingly followed perceptions of fiscal risk,” rather than the Fed policy path. Dan Niles, founder of Niles Investment Management, pointed to 6% as a plausible target for the 10-year yield during an appearance on CNBC and highlighted deficits around roughly 6% of GDP.
What happens next for markets
The warning for bitcoin optimists is that if yields rise because the Fed starts raising rates again quickly, the 2022 playbook will apply.
Pluang said the 10-year U.S. Treasury yield forecast is a key focus, with analysts predicting it could reach 6%, and it framed the rise as potentially linked to concerns over federal deficits and government debt growth.
Bitcoin has historically suffered when yields rose due to Fed tightening but performed well when yields rose due to fiscal risks, tying that pattern to the idea that fiscal worries could boost demand for alternatives like Bitcoin.
The sc market outlook said the 10-year yield has surged past 5.0% to a 19-year high and was trading at 5.2%, and it set a three-month forecast range of 5.0-5.25%.