According to The Kobeissi Letter, the US 2-Year Treasury Note yield has risen above 4% after market close, signaling a significant shift in risk-free interest rates (source: @KobeissiLetter, May 21, 2025). This development often prompts traders to reallocate capital away from risk assets like cryptocurrencies toward safer, higher-yielding bonds. Historically, spikes in Treasury yields have led to short-term volatility and downside pressure in the crypto market as liquidity tightens and investor appetite for risk decreases. Crypto traders should closely monitor bond market dynamics and potential capital outflows from digital assets, as elevated yields could impact Bitcoin and altcoin price action in the near term.

According to The Kobeissi Letter, before the April 2nd announcement of reciprocal tariffs, the US 10-year Treasury note yield was declining steadily, which allowed the trade war environment to persist as rates fell (source: @KobeissiLetter, May 21, 2025). However, as the basis trade unwound amid increased volatility, the 10-year yield spiked to 4.50%, and it now stands even higher. For crypto traders, this sharp rise signals heightened risk-off sentiment in traditional markets, driving capital flows and volatility that may influence Bitcoin and altcoin prices. Historically, surging bond yields can lead to liquidity shifts that impact crypto market dynamics, particularly for leveraged trading and stablecoin demand.

According to The Kobeissi Letter, the latest $16 billion auction of US 20-year Treasury bonds experienced unusually weak demand, resulting in a sharp rise in yields (Source: The Kobeissi Letter, May 21, 2025). This spike in yields reflects investor concerns over US debt appetite and signals tighter financial conditions, which historically triggers increased volatility in risk assets such as cryptocurrencies. Crypto traders should monitor bond yield trends closely, as further increases could pressure Bitcoin and altcoin prices through capital outflows and liquidity tightening.