Bitcoin Holds After 10-Year Treasury Hits 5.34%

The U.S. 10-year Treasury yield reached about 5.34% on Oct. 1, its highest level since 2002, capping a third quarter in which the benchmark climbed nearly 90 basis points. That rise increased the cost of capital for crypto positions while Bitcoin gained roughly 43% in Q3 and U.S.-listed spot Bitcoin ETFs attracted about $6.3 billion in inflows during the quarter.

The Federal Reserve’s H.15 release for Oct. 1 showed the 10-year at 5.29%, the 30-year at 5.64% and the 10-year real yield at 2.93%. Bond yields rose across major markets, and Brent crude traded back above $100 a barrel. U.S.-traded spot Ethereum ETFs collected about $3 billion in Q3, and Citi raised its 12-month Bitcoin forecast to $113,000 from $82,000, citing stronger crypto activity, ETF inflows and adviser and brokerage allocations.

Higher benchmark rates increased borrowing costs for explicit loans and for implicit leverage embedded in crypto products such as perpetual futures, basis trades, options structures and collateralized loans. Open interest on selected exchanges fell 14.3% on Sept. 25 as Bitcoin traded near $84,000 and the 10-year yield sat around 5.22%, reflecting a repricing of leverage across markets.

The quarter included several acute stress events for leveraged traders. On Sept. 23, a stronger-than-expected purchasing managers’ index coincided with rising yields and produced $135.8 million in long liquidations in a single hour and about $510 million over 24 hours. A separate energy-related shock that affected oil, bond yields and Fed expectations triggered roughly $568 million in forced liquidations.

Public companies that hold cryptocurrency on their balance sheets used equity, preferred shares and convertible debt to fund purchases. That model operates when shares trade at a premium to net asset value, allowing issuers to sell stock above NAV and buy more crypto with the proceeds. As yields climbed, many such companies saw premiums compress toward or below net asset value, raising the cost of preferreds and convertibles and widening the equity risk premium.

On decentralized finance, a 2026 study using Aave data found that the 10-year Treasury often added explanatory power for stablecoin borrowing and deposit rates. An analysis by European monetary researchers showed restrictive monetary shocks can reduce stablecoin borrowing demand and liquidity. Market tracker RWA.xyz lists more than 100 tokenized U.S. Treasury fund products, and a San Francisco Federal Reserve estimate projects stablecoin issuers’ Treasury holdings could roughly double to about $400 billion by 2030 if current growth continues.

Bitcoin’s price absorbed the third quarter’s bond shock. Financing structures that supported crypto positions have been repriced by higher Treasury yields.