Rising U.S. Treasury yields put pressure on stocks and Bitcoin

A jump in long-term U.S. Treasury yields to June levels sparked a fresh round of selling in stock markets and a firmer dollar. The easing of risk appetite also weighed on Bitcoin, which was approaching last week’s lows.

The yield on 10-year Treasuries, a key benchmark for financial markets, rose above the psychological 1.5% level last seen three months ago. In the previous four sessions, the increase totaled 20 basis points, almost a quarter of the total rise since the start of the year.

Fed meeting the rise in yields was driven by the deterioration of energy-supply conditions amid higher inflation expectations. Earlier, American monetary authorities signaled readiness to begin tapering support as early as November and a possible rate hike by the end of 2022 (votes split evenly).

On September 28, European gas prices surpassed $1000 per cubic metre, in the U.S. $6/BTU (the highest since 2014), and Brent crude rose to new post-pandemic highs — $80 a barrel.

Higher financing costs hit the stock market, particularly technology shares — on September 28, the Nasdaq Composite fell 2.83%. Against this backdrop, Bitcoin, which had risen above $44,000 earlier in the week, by the close of trading on Tuesday was below $41 000.

As of writing, Bitcoin traded at $42,380, up 1.9% over the last 24 hours, according to CoinGecko.

The mood improvement is aided by a modest retreat in government bond yields and attempts to form a technical rebound in futures on U.S. stock indices.

In a note, Galaxy Digital founder Mike Novogratz expressed confidence about the near-term prospects of digital assets, as long as Bitcoin stays above $40,000 and Ethereum above $2,800.

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