Bank of America Warns: Rising US Treasury Yields May Threaten Bitcoin, US Debt, and Financial Markets

Rising US Treasury yields are drawing warnings from both Bank of America and independent policy experts about potential negative impacts on Bitcoin, the broader cryptocurrency market, and the US economy. Michael Hartnett, Bank of America’s Chief Strategy Officer, noted that if the US 5-year Treasury yield surpasses 3.25%, the government’s $1.2 trillion interest bill would substantially increase, further straining fiscal stability. Should yields climb above 5%, a crisis in US equities and heightened financial volatility could follow—potentially spilling over to digital assets such as Bitcoin. These warnings come as the crypto market saw $2.3 billion in inflows last week, in contrast to $6.8 billion leaving US tech stocks, and a notable $9.8 billion inflow into high-yield bonds—the greatest since November 2023. Both market analysts and the Bitcoin Policy Institute urge traders to closely watch bond movements, as shifts in yields could prompt sharp reassessments in US trade policy, public debt management, and risk asset valuations. Monitoring these economic indicators is essential for crypto traders, as increased yields could heighten volatility and downside risks for Bitcoin and other cryptocurrencies.