The 30-year U.S. Treasury yield surged to 5.234% on July 30, hitting its highest point since 2007. This jump signals a shift toward safer government bonds as they become more attractive compared to riskier assets like Bitcoin and other cryptocurrencies. Bitcoin’s market value already dropped by over $675 billion from its peak in January, and the higher yields could tighten liquidity in the crypto sector even more.
Investors Growing Wary Amid Inflation and Market Shifts
Following the Federal Open Market Committee’s decision to keep interest rates steady between 3.5% and 3.75%, the economic outlook remains strong but inflation, driven partly by energy costs, remains a concern. The conflict in the Middle East closed the Strait of Hormuz, contributing to energy shocks that sustain inflation above the 2% target. This mix makes investors cautious, with crypto inflows to U.S. listed products dropping to $24.7 million the lowest since early July, according to data from SoSoValue.
Bitcoin’s demand in the U.S. is softening too. The Coinbase Premium Index, which measures premium prices paid by U.S. investors, has stayed negative since mid-May. AMBCrypto recently highlighted that the bearish tone across crypto markets might persist until at least the U.S. election period, dampening hopes for an immediate recovery.
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