U.S. Treasury yields have climbed to levels not seen in nearly two decades, intensifying pressure on risk assets including cryptocurrencies. The 10-year Treasury yield surged to about 5.20% on Sept. 24, its highest level since 2007, touching a session peak of 5.225%. The 30-year yield reached roughly 5.48%, the highest since 2004. Over the last two days, the benchmark yield rose by 30 basis points, bringing its one-month increase to 50 basis points. U.S. 30-year mortgage rates have climbed to 7.45%, up 150 basis points over six months. Rising oil prices, stronger inflation expectations, fiscal concerns and renewed Federal Reserve tightening bets have all contributed to the bond selloff.
Despite the bond market stress, equity volatility remains subdued. The Cboe VIX closed at just 15.67 on Sept. 24, implying an expected daily S&P 500 move of about 1%, because it measures stock options rather than bond volatility. Global equities have stayed resilient, with Reuters reporting that stocks were heading for their strongest week since early August on AI optimism and easing Middle East tensions. A similar disconnect has appeared in crypto: earlier this week Bitcoin rallied above $85,000 as falling oil and lower yields briefly improved risk appetite, while Bitcoin, Ethereum and XRP did not immediately collapse when yields first crossed 5%. Still, higher Treasury yields tighten financial conditions and increase competition for capital, raising the hurdle that expensive growth assets and crypto must clear.
