Is there a connection between Treasury yields and Bitcoin prices?

Yes. Bitcoin has shown increased sensitivity to Treasury yield movements, especially during periods of macroeconomic uncertainty. Rising yields can reflect inflation expectations and liquidity shifts that influence crypto markets.

Why do investors turn to crypto when Treasury yields rise?

Some investors see crypto, especially Bitcoin, as a hedge against inflation or a non-correlated asset when traditional markets become volatile. Rising yields can signal stress in bonds, prompting diversification into alternatives.

What does the 10-2 Treasury yield spread indicate for crypto investors?

The 10-2 spread is a widely tracked recession indicator. When it inverts, it often signals economic slowdown. This shift can lead to increased crypto interest from investors seeking assets less tied to traditional macro cycles.

How can advisors track these macro relationships using YCharts?

Advisors can use YCharts to chart Treasury yield spreads, overlay them with asset prices like Bitcoin, and visualize performance during macro shifts. Tools like Fundamental Charts and Spread Analysis help inform allocation decisions.

Resources > Blog > Economy > How Treasury Yields Are Influencing Crypto and What Advisors Need to Know

How Treasury Yields Are Influencing Crypto and What Advisors Need to Know

May 29, 2025

Financial chart with a blue background and green trend line with a green flag and mouse pointer.

Why Bitcoin Is Reacting to Treasury Yield Spread Inversions

The past few months have seen Bitcoin and Treasury yields climb and crypto prices surge at the same time. For many investors, that’s a head-scratcher. Isn’t crypto supposed to drop when interest rates rise?

It’s not that simple.

Advisors who understand the shifting dynamics between yields and digital assets are in a better position to explain what’s happening, why, and how it affects portfolio strategy. As investor behavior continues to evolve, so too must the lens through which we view cross-asset relationships.

In this blog, we’ll cover:

• Why Treasury yields are rising and what that means for broader market sentiment
• How crypto has historically reacted to yield shifts (and when it hasn’t)
• What it looks like when both rise together or sharply diverge
• Why this matters for client conversations and multi-asset strategy
• How YCharts can help visualize, track, and communicate these relationships

Crypto Acts Like a Risk Asset, Not a Hedge

Despite the narratives around digital gold and inflation protection, Bitcoin and Ethereum still behave like high-beta risk assets. That means they tend to rise when investors are feeling optimistic and flush with liquidity, not necessarily when inflation is running hot or yields are spiking.

In fact, crypto has shown:

• Strong correlations with equities during bull runs (especially tech)
• Sharp drawdowns during liquidity crunches (2022 tightening cycle)
• Sensitivity to Fed commentary, fiscal policy shifts, and macro trends

For most investors, crypto isn’t functioning as a hedge, it’s functioning as an amplifier. Understanding that dynamic helps advisors better manage expectations and align digital assets with the right allocation buckets.

When Crypto and Yields Move in the Same Direction

Download visual | View chart

So what’s going on when both yields and crypto prices are rising?

Here’s the breakdown:

Yields rising on growth optimism: When the market expects strong GDP, earnings expansion, or AI-led productivity gains, yields may climb without triggering a risk-off response. Crypto, as a forward-looking asset, rides that wave.
Yields rising but inflation in check: If real yields climb but inflation expectations are contained, capital still flows into risk assets.
Demand-side buying: Institutional flows into ETFs, retail speculation, and renewed miner demand can all boost crypto even as yields rise.

In short, not all yield spikes are equal. It’s the “why” behind the move that matters most.

When the Correlation Breaks

On the flip side, when yields spike due to inflation fears or aggressive Fed positioning, crypto often sells off. Investors exit risk to de-lever. Liquidity dries up. Volatility increases. And we see flight to safety.

This happened multiple times in 2022:

• Fed signals tighter for longer
• Treasury yields climb aggressively
• Bitcoin and Ethereum fall in tandem with growth stocks

The same may happen again if the Fed pivots hawkish or inflation re-accelerates. Advisors should prep clients accordingly, not with fear, but with scenario planning.

What Advisors Should Watch Going Forward

Here’s what to keep an eye on if you want to understand and explain crypto’s relationship to rates:

Yield Curve Movements — Watch the 2s10s spread for signs of steepening or inversion shifts. These impact macro outlook and risk appetite.
Fed Communication — Dot plots, CPI data, and Powell’s language continue to move markets. Crypto is highly sensitive to liquidity expectations.
Inflation Metrics — If inflation stays sticky while growth slows, that’s bad news for both bonds and crypto.
ETF Flows — Institutional inflows into spot BTC ETFs are now a real driver of demand. Look for correlations there.
Risk-On vs. Risk-Off Signals — When VIX rises, and Treasury demand spikes, crypto is more likely to pull back.

YCharts offers tools to stay on top of all these elements with real-time data, alerts, and visualization.

How to Use YCharts to Monitor Crypto and Treasury Yield Trends

You don’t need to guess when markets turn. With YCharts, you can visualize the connection between crypto and Treasury yields—and bring that story into client meetings.

1. Fundamental Charts

• Compare BTC or ETH against 10Y and 2Y yields over custom timeframes
• Overlay with inflation, Fed funds rate, or equity indices
• Spot reversals and divergences early

2. Yield Curve Tool

• View real-time shifts across the curve
• Analyze steepening, flattening, or inversion events
• Add macro context to fixed income strategy conversations

3. Scenarios & Attribution

• Stress test crypto holdings under different rate environments
• Use performance attribution to explain drawdowns
• Align allocation strategy with household-level goals

4. Alerts & Dashboards

• Set custom alerts on yield changes or crypto volatility
• Build macro dashboards for proactive reviews
• Empower clients with data, not noise

Final Take: Macro Awareness Drives Better Outcomes

It’s no longer enough to treat crypto and bonds as separate universes. Today’s market is macro-driven. The Fed sets the tone, yields signal confidence (or fear), and crypto reacts in real time.

For advisors, that means understanding correlations, context, and timing. It means using data not just to explain what happened—but to prepare clients for what might happen next.

With the right tools, you can move from reactive to proactive. That’s the difference between checking the box and adding real strategic value.

Whenever you’re ready, here’s how YCharts can help you:

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