Understanding the 10-year Treasury yield: Definition and importance
The 10-year Treasury yield is the interest rate that the US government pays to borrow money for 10 years.
When the government needs cash, it issues bonds called Treasury notes, and the 10-year note is one of the most watched. The “yield” is the annual return you’d get if you bought that bond and held it until it matures. It’s expressed as a percentage, like 4% or 5%.
Think of it as the government saying, “Hey, lend me $1,000, and I’ll pay you back in 10 years with some interest.” That interest rate and the yield move up or down based on demand for the bonds, inflation expectations and the overall economy. Because US Treasurys are considered safe (the government isn’t likely to default), the 10-year yield is a benchmark for “risk-free” returns in finance.
Why does this matter for crypto? Well, crypto yields and stablecoins are part of the broader financial world, and the 10-year yield influences investor behavior, which ripples into the crypto market. Let’s dive into how
Did you know? The crypto market has a Fear & Greed Index that gauges investor sentiment. When the 10-year Treasury yield spikes, it often triggers “fear” as investors worry about tighter money and less crypto speculation.
Impact of the 10-year Treasury yield on global financial markets
The 10-year Treasury yield isn’t just a US thing — it’s a heavyweight in global financial markets, influencing everything from stocks to currencies to emerging economies.
Since the US dollar is the world’s reserve currency and Treasurys are a global safe haven, changes in the 10-year yield send shockwaves worldwide. Here’s how:
- Stock markets: Higher Treasury yields can pull money out of stocks, especially growth stocks like tech companies, because investors can get better returns from bonds. In 2021, when yields spiked, tech-heavy indexes like the Nasdaq took a hit as investors shifted to safer assets. This shift can set the stage for how investors approach riskier assets like crypto.
- Borrowing costs globally: The 10-year yield influences interest rates worldwide. When it rises, borrowing costs for companies and governments increase, which can slow economic growth. For example, in 2022, rising yields contributed to tighter financial conditions, impacting everything from corporate loans in Europe to mortgage rates in Asia.
- Currency markets: A higher 10-year yield strengthens the US dollar, as investors flock to dollar-denominated assets. A stronger dollar can make cryptocurrencies, which are often priced in dollars, more expensive for international investors, potentially dampening demand. It also puts pressure on emerging market currencies, as their debt (often dollar-denominated) becomes costlier to repay.
- Emerging markets: Countries with weaker economies rely on cheap borrowing. When Treasury yields rise, capital flows out of riskier emerging markets into US bonds, causing volatility in their stock and bond markets. This can spill over into crypto, as investors in these regions may sell crypto assets to cover losses elsewhere.
- Inflation and monetary policy: The 10-year yield is a barometer for inflation expectations. If yields rise because investors expect higher inflation, central banks like the Federal Reserve may raise interest rates, tightening global liquidity. This can reduce speculative investment in assets like crypto, as seen in 2022 when aggressive rate hikes cooled markets.
For crypto investors, this global impact sets the context. A rising 10-year yield might signal a tougher environment for crypto prices and yields, especially if global markets get shaky. Conversely, low yields often fuel risk-taking, boosting speculative assets like cryptocurrencies.
Rising Treasury yields: Are safer returns stealing crypto’s yield appeal in 2025?
The 10-year Treasury yield, a critical indicator of global financial health, has shown notable volatility in 2025. As of May 9, 2025, the yield stands at approximately 4.37%-4.39%.
The yield’s movement is driven by factors such as trade tensions, inflation expectations and Fed policy, with recent rate cuts not lowering yields as expected, diverging from historical trends.
In the crypto space, yields are earned through activities like staking, lending and liquidity provision, often offering returns of 5%-10% or higher. However, the rising 10-year Treasury yield poses challenges.
Research suggests that higher yields on safe assets can reduce demand for riskier crypto yields, as investors may prefer the stability of Treasurys. This competition for capital can lead to lower participation in crypto lending platforms, potentially pushing yields up to attract users, but overall market activity may…
cointelegraph.com