The yield on the U.S. 10-year Treasury has been climbing for months, and some analysts now say it could reach 6% in the coming months, a level last seen in 2000. According to CoinDesk, that outcome does not automatically spell trouble for bitcoin.
10x Research founder Markus Thielen argues that the key issue is what is driving yields higher. When yields rise because Federal Reserve policy is tightening, bitcoin tends to come under pressure. But if investors are demanding higher returns because of budget deficits, rising public debt and broader fiscal concerns, that can strengthen the case for alternative assets such as bitcoin.
Recent market history partly supports that view. In 2022, the 10-year yield more than doubled to 3.88% as the Federal Reserve delivered rapid rate hikes. Bitcoin fell 64% that year. Since the end of 2023, however, the picture has changed: the 10-year yield has risen 135 basis points to 5.23%, while bitcoin has roughly doubled to $86,000, even after retreating from its October record above $126,000.
Thielen and other analysts attribute much of the latest move higher in yields to fiscal worries and a rising term premium. In practical terms, investors want greater compensation for locking money into long-dated bonds amid uncertainty over inflation and government borrowing.
Thielen says the 6% call also reflects the fact that bond yields still remain below nominal GDP growth, at 5.24% versus 6.56%, and well below the roughly 8.5% annual growth in federal debt since 2020. In his view, that means bondholders are not yet being fully compensated for the pace of expansion in the nominal economy and the debt stock.
