Some analysts expect the 10-year US Treasury yield to be heading toward 6%, a level last seen in 2000. Markus Thielen, founder of 10x Research, said in a note to clients on Tuesday that he expects the 10-year yield to rise to 6% in the coming months, noting that the key point is that yields remain well below nominal GDP growth, at 5.24% versus 6.56%, and below the roughly 8.5% annual growth in public debt since 2020. Dan Niles, founder of Niles Investment Management, said during an appearance on CNBC that 6% is a plausible upside level for the 10-year yield, pointing to deficits running at around 6% of GDP and large technology companies competing directly with the Treasury Department to raise funds in the debt market. Thielen and other analysts say the recent rise in yields stems largely from fiscal fears and a higher term premium, and that if it is driven by fiscal concerns rather than Fed tightening, that is a bullish case for bitcoin. Since the end of 2023, the 10-year yield has risen 135 basis points to 5.23%, the highest since 2007, while bitcoin has roughly doubled to $86,000, though it has pulled back from an October record above $126,000. The caveat is that if yields surge because the Fed begins rapidly raising interest rates again, the textbook 2022 scenario, in which bitcoin fell 64%, would come back into play.
BitcoinAnalysts say rising 10-year Treasury yields driven by fiscal fears rather than Fed tightening would be a bullish case for bitcoin.
