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Data insight · Sep 23, 2026 · 8 min read

Bitcoin rallied into 5% Treasury yields. It is not supposed to do that.

In the same week the ten-year Treasury yield closed at 5% for the first time since 2007 and the Federal Reserve raised rates, bitcoin began a 14% climb. Every textbook says a 5% risk-free rate should starve an asset that pays no income. This is what the data says instead.

The Ionic colonnade of the US Treasury Building in Washington in late-afternoon autumn light

The week everything pointed the wrong way

Look at the middle of September from the bond market and it reads like a warning. On 15 September the ten-year US Treasury yield closed at 5.00%. It closed at 5.01% on the 16th and again on the 18th. Those were its first closes at or above 5% since 2007. Even the October 2023 peak, the high of the last hiking cycle, stopped at 4.98%.

On 16 September the Federal Reserve raised its policy rate by a quarter point, to 3.75%–4.00%, in a unanimous 12–0 vote. It was its first increase since July 2023. The statement did not hedge: “Inflation remains elevated.” The day before, the Senate had failed to advance the CLARITY Act, crypto’s market-structure bill, by 49 votes to 50, as CoinDesk reported.

Bitcoin’s lowest close of the month came on 16 September, at $75,839. Six days later it closed at $86,683.

Chart: The 10- and 30-year US Treasury yields since mid-2025, with bitcoin overlaid. Yields climbed from February; bitcoin’s best run of the year came as they made their last push to 5%. Open the chart

Why 5% is supposed to hurt

A Treasury bond pays its holder a known rate, backed by the US government. Bitcoin pays nothing. It has no coupon, no dividend and no rent, and its whole return is whatever the next buyer pays. When the risk-free rate is near zero, holding something that pays nothing costs little. At 5%, every dollar in bitcoin gives up five cents a year it could have earned for certain.

That is why 2022 was so brutal. The ten-year yield went from 1.52% at the end of 2021 to 3.88% at the end of 2022 while the Fed raised rates at the fastest pace in four decades. Over the same year bitcoin fell from $47,289 to $16,559, a 65% drop. Rising rates and falling bitcoin were the same story.

When the safest asset in the world pays 5%, anything that pays nothing has to promise more.

This year the relationship ran backwards

In 2026 the two lines have not moved the way 2022 taught everyone to expect. From the last day of 2025 to the end of February the ten-year yield fell from 4.18% to 3.97%, and bitcoin fell with it, from $88,190 to $66,583. Lower rates did not help.

Through the spring the two drifted apart without much pattern: yields edged up to about 4.4%, and bitcoin rallied to $77,000 in April before sliding to its low of the year, $58,979, on 30 June. Then came the part that matters. From the end of June the ten-year climbed from 4.44% to 5.01% and the thirty-year from 4.91% to 5.37%, the steepest leg of the year. Over the same stretch bitcoin went from $58,979 to $86,683, up 47%. Its best run of the year came while long yields made their last push to 5%.

The dollar did not explain it either. The Fed’s broad dollar index, on our dollar chart, was 119.7 at the end of 2025 and 119.5 on 18 September. Bitcoin’s rally did not come from a falling dollar.

Chart: The Federal Reserve’s broad, trade-weighted dollar index against bitcoin. Essentially flat across the rally. Open the chart

What is pushing yields up

The answer starts with why yields are rising. Some of it is the Fed: the August jobs report showed 162,000 jobs added with June and July revised up by 55,000, and a strong labour market with inflation still elevated is how you get a rate hike.

But the long end of the curve is moving for a reason of its own. The Congressional Budget Office estimated a $2.0 trillion deficit for the first eleven months of fiscal 2026, and the Committee for a Responsible Federal Budget pointed out that the US now spends more on interest than on defence. “Such extraordinarily high deficits are just one piece of our fiscal situation that is falling apart,” said its president, Maya MacGuineas. On 13 August the Treasury sold $25 billion of thirty-year bonds at 5.216%, the highest yield at a thirty-year auction since 2001.

When long-term yields rise because buyers want more to lend to a government running $2 trillion deficits, the bond market is not only pricing tighter money. It is pricing the risk of holding the debt.

The reading that fits the data

In 2022, yields rose because the Fed was draining money out of the system to kill inflation, and every asset that depended on cheap money went down with them. In 2026 the long end is rising because investors are asking for more to hold US debt. For an asset whose whole case is a fixed supply that no government can add to, that is not the same headwind. It is closer to the argument for owning it.

The buyers were there to act on that argument. The US spot ETFs took in $5.1 billion between 17 August and 22 September, with the biggest day of the year, $999 million, landing three trading days after the rate hike. We cover those flows and the short squeeze that came with them in the squeeze and the flood, and what the rally meant for the calendar in the best September on record.

None of this makes 5% yields good for bitcoin in every market. A sharp slowdown, a funding crisis or a Fed that keeps going could put the old relationship back in charge. What September showed is that the relationship is not fixed, and that the reason rates are rising matters as much as the level.

Yields rising because the Fed was draining money hurt bitcoin. Yields rising on fiscal worry have not.

What it means for a miner

A miner who keeps the coins has a simple relationship with interest rates. Electricity is paid in dollars, and a dollar that could sit in a Treasury bill at close to 4%, or in a ten-year bond at 5%, has a price. So the coins a machine mines have to outrun that rate over the life of the machine, which is the honest hurdle for any mining decision today.

A month like this one clears it by a wide margin. Hashprice, what a unit of hashrate earns in a day, rose from $30.50 per petahash per day on 14 August to $40.31 on 22 September, and our cost-to-mine chart put the electricity behind one bitcoin on our cheapest power at about $26,500 against a price above $86,000. At 5%, the bar is higher than it has been in almost twenty years. Cheap power is how a miner stays over it.

Sources and further reading

Disclosure

Firsthand Bitcoin sells and hosts mining hardware, including this machine. No manufacturer, distributor or affiliate programme paid for or reviewed this page and we take no commission on the links above. Historical figures are computed from daily bitcoin price and network hashprice, each day valued at its own prices. Nothing here is investment advice.