High interest rates have not been bitcoin's friend in the past, and the benchmark 10-year U.S. Treasury yield recently reaching new generational highs comes at an especially inconvenient time for the cryptocurrency. Bitcoin's price has held up in this year's rising rate environment, but it's also struggled to reach new highs, as investors seeking regulatory certainty in crypto remain on the sidelines.
In the past, high yields have put pressure on crypto, giving investors fewer reasons to bet on high-risk assets such as bitcoin in the face of high yield, low risk assets like government bonds. "It's going to be hard for bitcoin to really gain any upward momentum with rates and real rates continuing to back up," said Rob Ginsberg, an analyst at Wolfe Research.