10-Year Treasury Yield Hits 5.31%, a 2002 High; Bitcoin Holds $85,600
The 10-year US Treasury yield closed at 5.31% on Oct. 5, a level last seen in 2002, as bitcoin failed to break $87,000 for a third time since Sept. 23.
The 10-year US Treasury yield closed at 5.31% on Monday, October 5, up from 5.24% on October 1, according to the Treasury Department's daily par yield curve. CoinDesk noted the benchmark is at levels last seen in 2002. The 30-year yield rose to 5.66% and the 2-year to 4.84%. Bitcoin, meanwhile, slipped about 1.2% to around $85,600 on Tuesday after failing to break $87,000 for the third time since September 23.
The Fed is hiking, the bond market is nervous
The backdrop is a Federal Reserve that is tightening, not easing. On September 16 the Fed raised the federal funds target range by a quarter point to 3.75–4.00% in a 12–0 vote, saying: "Inflation remains elevated." Labor data have softened since. The September jobs report, published by the BLS on October 2, showed payrolls rising by just 29,000, with unemployment at 4.2% and the prior two months revised down by a combined 60,000. Long-term yields kept climbing anyway.
Bond-market volatility is rising with them. The MOVE index, which tracks expected swings in Treasury yields, has climbed to 116, near its March high of 115, while bitcoin's implied volatility gauge and the S&P 500's VIX sit near year-to-date lows, CoinDesk reported. "The MOVE leads: it flashed turbulence before the VIX in 2022, in 2023, and at the start of the Iran war," wealth manager Kurt Altrichter told the outlet.
Equities have so far looked past the pressure: the Nasdaq 100 closed at a record on Monday and the S&P 500 is within 0.5% of its all-time high. Bitcoin has not joined the rally. "The price has approached the apex of the triangle formed by horizontal resistance and rising support," said FxPro analyst Alex Kuptsikevich, pointing to a likely rise in volatility. Total crypto market capitalization stands at $2.93 trillion, per CoinDesk.
Next on the calendar are the minutes of the September meeting, due Wednesday, October 7, three weeks after the decision, and the next FOMC meeting on October 27–28.
What it means
Higher risk-free yields raise the bar for assets that pay no income, including bitcoin, and a jump in bond volatility has historically hurt it more than the direction of rates itself, according to CoinDesk's analysis. For now, bitcoin is range-bound below $87,000 while stocks rally, so the bond market is the macro variable to watch into the Fed minutes. We update yields and the market regime daily on our market pulse and in the daily brief.
