The 10-year Treasury yield topped 5% on Monday, matching its highest level in three years. Bond investors kept pushing rates higher despite the Trump administration’s efforts to calm the market.
The move raises borrowing costs across the economy. It could also squeeze both stock valuations and Bitcoin (BTC), whose price already competes with higher-yielding, low-risk government debt.
Stocks Face a Valuation Test
Higher yields make government bonds more competitive with equities. Investors can lock in strong, low-risk returns instead of taking on stock market risk.
Analysts see this as a genuine threat if yields keep climbing.
“greatest near-term concern for stocks”
Antony Ghee is head of equity investments for the chief investment office at Merrill and Bank of America Private Bank. He used that description for a sustained climb past 5% on the 10-year yield, per The New York Times.
Rising yields also raise financing costs for companies themselves. That cuts into the profits that help support stock prices. Heavy government borrowing and AI-related infrastructure debt have added to the pressure on yields this year.
Bitcoin’s Opportunity-Cost Problem
Bitcoin was trading near $77,800, up slightly on the day. It has largely held steady through the yield move so far.
The logic is simple. A safe, five percent return from government debt raises the bar for riskier assets like Bitcoin to look attractive. Non-yielding assets face that pressure most directly, and higher rates make that trade-off even sharper.
That calculation could shift fast this week. Traders currently price a high chance of a Fed rate hike at its meeting. The decision could ease or extend the pressure on risk assets.
A hold or dovish signal would likely lower yields and ease pressure on stocks and Bitcoin. A hike paired with hawkish guidance would likely do the opposite.
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