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Bitcoin faces long-duration Treasury competition as yields near 5.3%
Crypto-collateralized lending has fallen by $22.5B from its 2025 peak to $56.16B, reducing the amount of debt collateral supporting the market.
The US 30-year Treasury yield crossed 5.3% on Aug. 17 for the first time since June 2007, reaching 5.2954% and as high as 5.314% intraday, with a reported push toward a first close above 5.3% in nineteen years, according to CryptoSlate. The same day, Galaxy published data showing crypto-collateralized lending had dropped more than $22 billion from its prior peak.
CryptoSlate said the Treasury move stood out because it ran opposite the usual reaction to softer US economic data, with traders cutting the odds of a September Fed move to about 31%, down from 55% a week earlier. Instead, reports tied the rise to concerns about the US fiscal trajectory and heavy AI-related corporate debt issuance.
The report highlighted that governments and AI companies are borrowing at the same time as investors can lock in a real, inflation-adjusted return from Treasuries, while Bitcoin still does not offer a native yield. Alphabet, Amazon, and Meta have issued almost $220 billion in bonds this year, more than double the $108 billion those three companies issued across all of 2025, CryptoSlate reported.
On the crypto side, Galaxy's Q2 2026 leverage report put crypto-collateralized lending at $56.16 billion, down $11.33 billion in the quarter and $22.53 billion below the $78.69 billion high reached in Q3 2025. Galaxy also cited a decline in DeFi lending borrowing from a $47.13 billion peak last September to $21.94 billion by July 21, and described the current drop as gradual risk reduction rather than the forced liquidations that defined the 2022 cycle, CryptoSlate said.
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