US Treasury yield curve steepening to its widest since 2021… “a headwind for Bitcoin”

The gap between long- and short-term US Treasury yields has widened to its largest level since 2021, raising concerns it could act as a headwind for Bitcoin (BTC), an analysis said.

On the 23rd (Korea time), Cointelegraph, a cryptocurrency-focused outlet, reported that the spread between the yields on the 30-year and 2-year US Treasuries has recently widened to the most since 2021.

This indicates long-term yields are rising rapidly. When long-term yields climb, returns on safe-haven assets such as Treasuries increase, making it more likely that investors rotate out of risk assets into safer assets.

Behind the rise in long-dated US Treasury yields is a sharp jump in Japan’s 30-year government bond yield. Japan’s 30-year JGB yield rose to 3.92% this week, hitting a record high. As a result, the spread between Japan’s 30-year and 2-year yields widened to about 220–325bp.

David Roberts, head of bonds at Nedgroup Investments, told Bloomberg in an interview, “In an environment where long-term yields continue to rise, global equity markets have no choice but to come under pressure,” adding that “upward pressure on yields is particularly pronounced in Japan’s long-dated government bond market.”

Lauren Van Biljon, senior portfolio manager at Allspring Global Investments, forecast that “Japan’s 30-year yield could rise a further 75–100bp (due to Japan’s fiscal expansion).”

As of 10:52 p.m. today, Bitcoin was trading at $89,212, down 0.35% from the previous day, according to CoinMarketCap.