Rising yields trigger flight-to-safety selling. Tech stocks and crypto—the riskiest assets—face the heaviest pressure. Bitcoin is down 3% weekly at $63,260.
Once 10-year yields hit 5%, inflation expectations shift. This level historically marks a structural turn in how capital flows between bonds and risk assets.
Record budget deficits and AI capex booms drive heavy Treasury issuance. More supply, less demand = higher yields. This dynamic persists until capex spending moderates.
When risk-free returns are high, crypto loses its inflation-hedge advantage. This likely caps Bitcoin gains until yields stabilize or recession fears spike.
Monitor the 10-year yield's path toward 5% and Fed rate-cut expectations. A break above 5% could trigger another leg down in crypto and tech.
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