This Tuesday, May 19th, the yield on the 30-year US Treasury note reached 5.19%, the highest level since July 2007, which caused caution in the Bitcoin (BTC) market as it could affect the price of the digital currency.
This increase in U.S. public debt securities, among other factors, could be responsible for the 6% drop in Bitcoin prices last week. decreased from $81,100 to $76,800the price at which the crypto asset has not been registered since May 1st last year.
The reason for the rise in bond yields is directly related to the rise in energy prices.
This energy rebound began with the war between the United States and Iran that began on February 28th. Geopolitical conflicts exacerbating inflationary pressures internationally As a result, the US Federal Reserve (FED) may be forced to consider raising interest rates.
Before this Middle East conflict broke out, US bond yields are trending lower As seen in the graph, after years of sustained inflation, prices reached 4.62%.
Analysts at Kovisi Letter, an economic newsletter, explained that in the early days of the Iran war, “U.S. bond yields rose, but their movements were mostly subdued. The consensus was that the war would be short and that the Strait of Hormuz would not remain closed. Even now, traffic is close to zero.”
The Strait of Hormuz is an important strategic shipping route connecting the Persian Gulf and the Gulf of Oman, through which 20% of the world’s oil passes. The blockage has pushed oil prices above $100 a barrel for almost two months, reaching prices not seen since 2022.
This caused the US Producer Price Index (PPI) to rise. Up to 6% YoY in April 2026 (4.3% as of March). Meanwhile, the Consumer Price Index (CPI), which directly measures national retail inflation, rose to 3.8%, the highest level for both indicators since 2023.
In this regard, analysts at Kobeisi Letter said, “When inflation rises, long-term interest rates rise to compensate for lenders’ risk,” adding that “we are experiencing the worst inflation since the post-pandemic recovery.”
Investor Quinten Francois disagrees with the idea. The Fed can safely continue raising rates. The market has “basically cornered the Fed,” Francois said, leaving the Fed with only two extreme options. They can either print money again (which could reduce the value of the dollar and benefit Bitcoin in the long run), or they can let the system collapse under the weight of its own debt. “You know how that goes,” he says, implying that large-scale money printing is the response of choice.
Meanwhile, Ajay Rajadhyaksha, global president of research at Barclays, warned that “returns may reach annual highs, but that alone does not justify long-term investment.” nevertheless, Barclays strategists expect returns could exceed 5.5%A level not seen since 2004.
This environment has a negative impact on Bitcoin (BTC) and other cryptocurrencies. In a scenario where interest rates rise, U.S. government-backed bonds offer attractive and safe returns, making assets considered “risky” less attractive and causing capital outflows from these markets.
The crisis is not limited to the United States. As reported by CriptoNoticias, in countries like Japan, for example, government bonds have also recorded strong rebounds, driven by the same global oil prices. Asian countries are highly dependent on energy, causing domestic inflation. Adding further pressure to the global bond landscape.
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