Bitcoin (BTC) and other cryptocurrencies are pulling back on Oct. 7 as the yields on U.S. Treasury bonds rise to their highest level in nearly 25 years.
Bitcoin, the largest digital asset by market capitalization, is trading 2% lower at $83,500 U.S., while Ethereum (ETH) is down 5% and changing hands at $2,565 U.S.
The decline comes as the yield on the benchmark 10-year U.S. Treasury rises eight basis points at 5.35%, its highest level since 2002.
The yield on the 30-year Treasury bond is up 8.3 basis points to 5.724%, also a 24-year high.
The bond market is on edge as the U.S. Treasury prepares to sell $39 billion U.S. of 10-year notes in an auction on Oct. 7.
Bond traders around the world are watching to see the demand for the U.S. Treasury auction and if yields will need to rise further to attract buyers.
The market is waiting to see if Treasury yields are now attractive enough to draw buyers, or if investors will demand an even bigger premium to hold U.S. government debt.
Higher interest rates are negative for risk assets such as Bitcoin and other crypto. The higher Treasury yields also continue to pressure stocks.
Until Oct. 7, Bitcoin’s price had been holding steady at $86,000 U.S., its highest level in eight months.
