The difference between US long, term and short-term Treasury yields has increased to the highest point since 2021, and market analysts say this is a factor that could pressure Bitcoin (BTC) going into 2026.
When long, dated yields go up, holding non-yielding assets like Bitcoin becomes more expensive in terms of opportunity cost, which then works against the digital asset.
If the yield curve becomes steeper, which can be seen in a bigger difference between 2, year and 30, year Treasury yields, it means that investors want more return for the risk that they are exposed to in the long run.
David Roberts, who is the head of fixed income at Nedgroup Investments, explains that stocks can be negatively impacted if yields are kept at a high level for a long time, which in turn can drag down high, beta assets like Bitcoin.
This is the rationale that accounts for the frequent inverse price movement of Bitcoin to the expansion of yield spreads, particularly when such a move is caused by external events like the disruption in Japan’s bond market.
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Japan’s 30-year government bond yield has jumped to a record high of 3.92%, expanding its difference with the 2-year yield by 220,325 basis points.
Lauren van Biljon from Allspring Global Investments says that the spread could go up by another 75100 bps if Prime Minister Sanae Takaichi’s fiscal expansion plans are implemented. Since U.S. 30year yields usually follow the trend of their Japanese counterparts, the majority of the market is expecting the U.S. longterm rates to do the same.
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The global increase in longterm yields, therefore, raises financial conditions and makes it less likely that investors will take on risky assets, which then puts pressure on the market value of Bitcoin.
Under these circumstances, it will be quite challenging for Bitcoin to retake the significant psychological levels around $100, 000, especially if investors lean towards stores of value with lower volatility.
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