The U.S. 10-year Treasury yield hovered near 5.29% on Friday, just below its recent peak of 5.34% — the highest level since April 2002, when it briefly hit 5.36%. The move is fueling fears across global markets, with Pimco chief investment officer Dan Ivascyn calling a further jump to 6% “feasible.” He warned that a rise above 5.5% could trigger “some decent weakness in risk markets, both credit and equity,” and said cryptocurrencies may also struggle as investors shift toward higher-yielding government bonds.
CoinShares echoed that concern in its October 8 market update, noting that digital asset funds have attracted about $11.1 billion since mid-July, but fresh inflows slowed as the 10-year Treasury yield climbed above 5.3% and the 30-year yield reached 5.7%. Its head of research, James Butterfill, said Bitcoin’s next move may depend more on the bond market than on Federal Reserve rate decisions. The firm added that if rising yields reflect worries about U.S. government debt, investors may eventually consider Bitcoin as an alternative to traditional currencies — though fund flows do not yet show that rotation.
Bond-market anxiety is also visible in other areas. More than 70% of the increase in yields since late February has been attributed to higher real rates and a widening term premium, according to Russell Investments. Market analyst James E. Thorne linked roughly two-thirds of the recent 10-year yield rise to the term premium, arguing investors have lost confidence in the Fed’s policy approach. Meanwhile, Goldman Sachs expects hyperscalers to borrow $420 billion in debt next year, adding to bond supply pressure, and Freddie Mac reported the 30-year fixed mortgage rate climbed to 7.40% on October 8 from 7.28% a week earlier.
Additionally, the New York Fed’s planned purchase of $3.891 billion in Treasury bills on October 9 drew attention from crypto traders as a possible liquidity boost. However, analysts noted that routine Treasury bill purchases are not the same as quantitative easing, and CoinShares said the probability of an October Fed rate increase fell from 71% to 23% after weaker employment data. If yields remain near 6%, the pressure on stocks, corporate credit and Bitcoin could persist.
