Bitcoin (BTC) Price Gains Attention as US 10-Year Treasury Yield Drops Below 4%

YEREVAN (CoinChapter.com) — The US 10-year Treasury yield dropped below 4%, marking the first time since October 2024. This decline came during growing concerns over economic uncertainty, rising recession fears, and expectations that the Federal Reserve might cut interest rates sooner.

The yield on the 10-year Treasury fell below 4% for the first time since October 2024 on Monday, as growing concerns over economic uncertainty and rising recession fears drove expectations of sooner-than-expected interest rate cuts by the Federal Reserve.

The financial platform Barchart posted data showing the drop in yield, which comes amid reduced demand for government bonds. Lower Treasury yields translate to less attractive returns on safer investments, potentially pushing some investors toward riskier assets like Bitcoin.

The 2-year Treasury yield also dropped sharply following new tariff announcements. This decrease suggests that the bond market anticipates an interest rate cut or a shift in monetary policy.

Bitcoin gains attention amid falling Treasury yields

Lower yields on 10-year Treasuries usually make bonds less appealing. As bond returns decrease, some investors might shift capital to other assets. In past instances, Bitcoin has often attracted attention during similar times.

Crypto analyst Dan Gambardello explained that falling yields diminish the incentive to keep money in government bonds.

“Less reason to sit in ‘safe’ bonds = more reason to chase returns in risk assets like BTC and alts,” Gambardello noted on X, summarizing the sentiment.

This view aligns with past market behavior. When real yields decline, investors tend to increase exposure to Bitcoin and other digital assets due to increased liquidity and potential returns.

Former BitMEX CEO Arthur Hayes also touched upon the situation, highlighting that the 2-year Treasury yield fell sharply following the recent Trump tariffs. This drop signals that the market expects rate cuts from the Federal Reserve.

“The 2yr treasury yield dumped after Tariff announcement because the market is telling us the Fed will be cutting soon and possibly restarting QE to counter -ve economic impact,” Hayes wrote on X.

His statement connects the tariff decision with possible quantitative easing (QE). This policy involves the central bank adding money into the economy, which can increase liquidity in markets like crypto.

Trump Tariffs Fuel Market Volatility

The yield decline follows new tariffs introduced under Donald Trump’s economic strategy. These tariffs have raised concerns about slowing global trade. Investors moved funds into US bonds, pushing bond prices up and yields down in response.

During his first term, Trump frequently called for a weaker dollar and lower interest rates, urging the Federal Reserve to cut interest rates to support US exports and spur economic growth.

Kristoffer Kepin, a market analyst, observed that the M2 money supply is increasing, which could lead to more liquidity entering the markets, including Bitcoin and other digital assets.

Major financial firms still favor traditional safe havens over Bitcoin. Goldman Sachs recommended the Japanese yen and gold as more reliable options during economic uncertainty.

“The yen offers investors the best currency hedge should the chances of a US recession increase,” said Kamakshya Trivedi, the bank’s head of global markets strategy, in remarks to Bloomberg on Monday.

Notably, Bank of America’s latest survey of fund managers showed that 58% favored gold in trade conflict scenarios, while only 3% preferred Bitcoin, indicating continued caution around digital assets during global market stress.