Treasury yields at 5% threaten extending Bitcoin’s best quarter since 2017 — SkimNews
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- Bitcoin gained 43% in Q3 2024 — its best third quarter since 2017 — and posted a third straight weekly advance last week, per Delphi Digital.
- Treasury yields above 5% are creating "real resistance" for risk assets, per Delphi Digital, because a 5%+ risk-free return forces every risky asset "to work harder to deserve the money."
- Bitcoin briefly topped $87,000 last week before correcting lower and has gained more than 35% since mid-August, when the US Treasury announced plans to double long-dated debt buybacks targeting 10- and 20-year notes — buybacks that have since tripled in size.
- The US economy added just 29,000 jobs in September, well below the 80,000 forecast, per the Bureau of Labor Statistics; CME FedWatch odds of an October rate hike fell from 75%+ to roughly 24%.
- New York Fed President John Williams, a voting FOMC member this year, said there is "no need for urgency" on another rate increase after the September policy action.
- Arche Capital managing partner Vanessa Grellet argued the "debasement trade doesn't require low interest rates," citing growing investor focus on federal deficits and rising government interest costs.
Why it matters: The tradeoff is now explicit: investors can lock in 5%+ risk-free Treasury yields or chase Bitcoin's 35% mid-August-to-present rally on a debasement thesis. With the 29K September payroll print giving the Fed cover to pause, Bitcoin bulls bought a reprieve — but the bond market's 5% floor now sets the bar every risk asset must clear to keep attracting capital.
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