The U.S. 30-year Treasury yield reached 5.16%, its longest sustained stretch above 5% since 2007, raising concerns about borrowing costs and risk-asset returns. The yield’s rise reflects inflation expectations, Treasury supply, and fiscal concerns, potentially pressuring crypto by making lower-risk assets more attractive. Oil disruption from the Middle East conflict, particularly around the Strait of Hormuz, has added to inflation worries. Despite these pressures, U.S. spot crypto ETFs attracted $667.32 million in net inflows during the current week—the strongest total since early May. The divergence suggests institutional crypto demand remains resilient against long-term yield headwinds.
The U.S. 30-year Treasury yield reached 5.16%, according to data from The Kobeissi Letter. The yield crossed 5% on July 7 and remained above it for 16 days, marking its longest sustained stretch above that level since 2007.
Long-term yields reflect inflation expectations, Treasury supply, fiscal concerns, and demand for government debt. Their current rise suggests investors expect interest rates and borrowing costs to remain elevated.
Higher Treasury yields can pressure crypto by making lower-risk assets more attractive and increasing the return demanded from speculative investments. However, the yield does not prove investors are directly rotating from crypto into government debt.
Oil disruption from the Middle East conflict has added to inflation concerns, particularly around the Strait of Hormuz. Iran said it had closed the waterway, while the U.S. continued efforts to protect commercial transit.
Crypto analyst DarkFost stated: “This is where Trump will need to ease tensions with Iran.” De-escalation remains the analyst’s expectation rather than a confirmed policy outcome.
Despite the Treasury warning, U.S. crypto exchange-traded funds continued attracting capital. According to SoSoValue data, net inflows across tracked crypto ETFs totaled $667.32 million during the current week, the strongest since the week beginning May 8, when inflows reached approximately $771.2 million.
The divergence suggests institutional crypto demand has remained resilient despite pressure from long-term yields. De-escalation around the Strait of Hormuz could reduce oil supply concerns and ease part of the inflation pressure.
Lower energy prices may support risk appetite, particularly if Treasury yields retreat alongside inflation expectations. U.S. M2 reached $23.05 trillion in May, according to Federal Reserve data, but this money supply cannot be treated as capital waiting to enter crypto. For now, ETF inflows show resilience, while the 30-year yield remains a warning against assuming a full risk-on shift.
