Crypto markets had a good run in the last quarter of 2024, but the trend of rising government bond yields around the world appears to have been too strong to ignore.
Considered the world’s standard-setting benchmark, the US 10-year Treasury yield rose to 4.70% on Wednesday, near a multi-year high and is now up more than 100 basis points since the first The Federal Reserve cut its feed. funds rate in September.
Action in the UK was more extreme, with the 30-year Gilt yield on Wednesday rising to 5.35%, its highest level since 1998. It has advanced 105 basis points since the Fed’s first rate cut in September .
Big increases in interest rates were not limited to the US and UK, as Germany, Italy and Japan — to name three — experienced similar action. Japan’s 10-year JGB yield, in fact, rose to 1.18% — a relatively small number, but its highest level in nearly 15 years.
Rising yields for much of the past few months don’t appear to be dampening crypto price action, with bitcoin and several other digital assets rising to record or multi-year highs in the early to mid of December. Price action since then has been a different story, with bitcoin — for example — down more than 10% from its record high of more than $108,000 set just three weeks ago and several other majors lower by much larger amounts.
There’s always an exception and this time it’s China, where yields are falling sharply on deflation concerns. According to a X post of The Kobeissi Letter, China is experiencing its longest period of deflation since 1999.
