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TIPS data and oil-linked fears push real yields higher, weighing on crypto
Cointelegraph says the bond sell-off has aligned with a multi-month rise in 30-year Treasury yields and correlating moves in WTI and the two-year yield since March.
US Treasury yields are rising as TIPS-related data points to real yields moving higher rather than inflation expectations, a shift that is pressuring non-yielding assets such as Bitcoin, according to Cointelegraph.
Cointelegraph reports that after the latest Federal Open Market Committee meeting, 30-year Treasury yields reached the highest level since 2007. In the same window, the two-year yield rose by 76 basis points, and CME FedWatch data shows a September Federal Reserve rate hike being priced at 63%.
Cointelegraph links the bond sell-off to higher commodity and energy prices and cites the start of the Iran war and the closure of the Strait of Hormuz as part of that backdrop. It also notes that daily closes of the two-year Treasury yield, West Texas Intermediate, and Brent have correlated since March, with a coefficient of r equals 0.44, and that WTI briefly rose above $85 a barrel on Thursday amid renewed tensions.
With rates at elevated levels, Cointelegraph says government bond investments have become more profitable than cash-and-carry trades in crypto markets for the first time since 2019, citing Glassnode research. It adds that some market participants argue oil-driven developments are fueling concerns about the path of rates through inflation expectations.
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