The 10-year Treasury yield hit 4.69% on May 24, its highest level since January 2025. The 30-year yield punched through 5% to reach 5.12%, a number investors haven’t seen since 2007. For President Trump, heading into midterm season with borrowing costs at multi-year highs, the timing could not be worse.

A 50 basis point problem

Since late February, the 10-year yield has climbed more than 50 basis points, making the cost of borrowing money for the US government meaningfully more expensive in about three months.

Tensions around the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world’s oil passes, pushed crude prices above $100. Higher energy prices feed directly into inflation expectations, which in turn push yields higher. A reported $200 billion Pentagon funding request tied to potential war-related expenditures adds fuel to an already blazing deficit fire, alongside a projected $2 trillion deficit.

Late May brought a brief reprieve. Optimism around peace talks with Iran eased yields back to the 4.47% to 4.56% range.

What this means for crypto

Bitcoin struggled to hold above the $82,000 resistance level in mid-May as higher yields tightened liquidity across risk assets. The correlation between rising yields and declining Bitcoin prices has been one of the more reliable macro relationships of the past few years. It broke down briefly in late 2024 and early 2025 when ETF-driven inflows overwhelmed the macro signal. But with that initial ETF demand wave now absorbed, the traditional yield-crypto inverse relationship appears to be reasserting itself.

The refinancing wall looms

The $10 trillion refinancing figure deserves its own spotlight. That’s the amount of existing US government debt that needs to be rolled over within the next 12 months, roughly equivalent to the combined GDP of Japan and Germany.

If yields remain elevated when that debt gets refinanced, the interest burden on the federal budget balloons. Higher interest payments mean either more borrowing or spending cuts elsewhere, neither of which is politically palatable heading into midterms.

Bitcoin sitting below $82,000 resistance while Treasuries offer their best yields in nearly two decades is not a coincidence. Until the macro picture shifts through lower inflation, resolved geopolitical tensions, or a Federal Reserve pivot, the gravitational pull of higher yields on crypto prices is likely to persist.