Key Insights:
- Bitcoin price fell 2.8% to $83,443 as Treasury yields and the dollar moved higher.
- Tradeweb recorded a 5.444% 30-year yield, the highest reading since 2004.
- U.S. spot Bitcoin and Ether ETFs attracted a combined $452 million on September 23.
Bitcoin price faced new pressure on Thursday as long-dated government borrowing costs climbed across major markets. In midmorning European trade, U.S. Treasury and German Bund yields reached multiyear highs.
The dollar also rose to an eight-week high against a basket of currencies. Bitcoin traded at $83,443, down 2.8% over 24 hours. However, it remained 8.80% higher over seven days. The global cryptocurrency market gained 8.40% during the same period.
That placed the Bitcoin price move within the day’s broader fixed-income developments.
U.S. Treasury Yield Sets Bitcoin Price Backdrop
Tradeweb data put the 10-year U.S. Treasury yield at 5.148%. That marked its highest level since 2007. The 30-year U.S. Treasury yield rose to 5.444%, its highest level since 2004. Together, the moves extended Wednesday’s U.S. sell-off, during which yields rose by 10 to 15 basis points.
Meanwhile, the 10-year German Bund yield rose more than four basis points to 3.579%. That placed the yield at its highest level since 2009. The 10-year U.K. gilt yield added 6.1 basis points to 5.381%. At the same time, the DXY dollar index reached 101.238, its highest level since late July.
U.S. purchasing managers’ data for September exceeded expectations on Wednesday. That data strengthened expectations for additional Federal Reserve rate increases after last week’s hike.
DHF Capital S.A.’s Bas Kooijman linked those expectations to higher Treasury yields and dollar strength. Federal Reserve Governor Michael Barr said further rate increases were likely needed to return inflation to the target promptly.
Furthermore, Raphael Thuin, Tikehau Capital’s head of capital markets strategies, identified yields of 5% or higher as a market focus. Thuin also questioned whether markets and the economy can operate with higher rates for longer.
Bond Selling Deepens Bitcoin Price Pressure
The bond-market move then placed Bitcoin price within a risk-sensitive trading environment. The market framework provided identifies rising real yields and a stronger DXY as bearish for Bitcoin. Similarly, the framework links stock declines caused by higher yields with a risk-off setting. It categorizes that setting as usually bearish for Bitcoin.
Further details from Wednesday centered on Treasury supply and trader positioning. Weak demand appeared at the five-year Treasury note auction and added to Treasury selling. The notes sold at a 5.033% yield, their highest auction yield since June 2006. That earlier June 2006 auction recorded a 5.203% high yield.
Moreover, Jefferies global economist Mohit Kumar reported that stop-outs and position unwinds drove much of Wednesday’s selling. Kumar also noted a breakdown in correlations among oil, rates, and risky assets. He described the move as dominated by position-squaring rather than fundamentals.
Next, ING’s Padhraic Garvey and Michiel Tukker outlined further weakness for long-dated bonds. They said another weak leg could occur in the coming months. Investors will watch the Treasury’s $44 billion auction of seven-year notes on Thursday. They will also watch its $6 billion buyback auction for 20- and 30-year bonds.
ETF Flows Offer a Separate BTC Price Data Point
While bond conditions shaped the macro backdrop, U.S. spot ETF activity moved in the opposite direction on September 23. SoSoValue recorded $347 million in net inflows for U.S. spot Bitcoin ETFs.
BlackRock’s IBIT led the group with $166 million. The flows arrived despite the falling Bitcoin price.
Meanwhile, U.S. spot Ether ETFs drew $105 million in net inflows. BlackRock’s ETHA accounted for approximately $50.8 million. The Bitcoin and Ether ETF categories, therefore, recorded about $452 million in combined daily inflows.
Additionally, the provided market framework treats ETF inflows as a potential offset to macro pressure. It also identifies a different condition for Bitcoin price. Rising yields alongside a weaker dollar would be less negative for Bitcoin. Thursday’s reported data instead showed higher yields and a stronger dollar.
