Bitcoin remains under pressure, continuing to trade below its key 200-day simple moving average despite a notable regulatory breakthrough in the U.S., as rising Treasury yields dampen risk appetite.
Although the Senate Banking Committee’s approval of the Clarity Act marked meaningful progress toward establishing a clearer crypto market framework, the development has done little to lift bitcoin’s price. Instead, macroeconomic forces—particularly the steady climb in bond yields—are dominating market direction.
The U.S. two-year Treasury yield rose to 4.05% during Asian trading, its highest level since June 2025. The yield has gained 13 basis points this week alone and more than 65 basis points since March, reflecting a sharp repricing of interest rate expectations.
This move follows stronger-than-expected inflation data, with April’s CPI and PPI reports suggesting that price pressures may remain persistent. Rising energy costs and geopolitical tensions linked to Iran are adding to concerns that inflation could stay elevated for longer.
As a result, investors are revising their outlook for Federal Reserve policy. With the benchmark rate currently in the 3.50%–3.75% range, the increase in short-term yields indicates that markets are beginning to price in the possibility of at least one additional rate hike.
CME FedWatch data shows the probability of a December hike has climbed to above 44%, up from just 22.5% a week earlier. This marks a significant shift from earlier expectations that the Fed would deliver multiple rate cuts before the end of 2026.
The bond market’s trajectory contrasts with President Donald Trump’s preference for sharply lower rates. Trump has advocated for cutting borrowing costs to as low as 1% to stimulate growth. However, under Federal Reserve Chair Jerome Powell, policymakers have taken a more measured approach, maintaining rates near current levels after gradually lowering them from around 5% in 2022.
Attention is also turning to the future leadership of the Fed, with former governor Kevin Warsh seen as a potential successor who may favor a more accommodative policy stance. For now, however, the central bank remains firmly guided by Powell.
Higher Treasury yields are increasing the opportunity cost of holding non-yielding assets such as bitcoin and gold. As risk-free returns become more attractive, capital is being drawn toward government bonds, which also play a central role in global financial markets as collateral and liquidity instruments.
Bitcoin is currently trading near $81,000, largely unchanged on the day but still below its 200-day moving average just above $82,000—a level widely viewed as critical for confirming a longer-term bullish trend.
Gold is also under pressure, slipping 0.7% to $4,614.
Meanwhile, the tokenized Treasury sector is emerging as a beneficiary of the rising yield environment. Demand for blockchain-based exposure to government debt continues to grow, with total value locked in these platforms surpassing $15 billion, highlighting increasing investor interest in yield-generating digital assets.
