Attention Bitcoin Bulls: The U.S. 10-Year Yield Isn’t Budging Despite Fed Rate Cut Hopes
Crypto bulls’ hopes for rate cuts to lower bond yields and the dollar are challenged by signals from the Treasury and the FX market.
Updated Dec 2, 2025, 1:59 p.m. Published Dec 2, 2025, 3:49 a.m.
As crypto bulls pin their hopes on Federal Reserve (Fed) rate cuts to drive a sustained decline in bond yields and the dollar, signals from the bond market tell a different story.
The Fed is expected to cut rates by 25 basis points to the 3.5%-3.75% range on Dec. 10, continuing the so-called easing cycle that began in September last year. Several investment banks, including Goldman Sachs, expects rates to drop to 3% next year.
An expected drop in interest rates typically weighs on Treasury bond yields and weakens the dollar index, both of which support increased risk-taking in financial markets and bodes well for digital asset such as bitcoin BTC$92,068.96, XRP$2.1781, solana SOL$139.88, DOGE$0.1463 and others. But that’s not happening of late.
The yield on the 10-year Treasury note continues to hover above 4% in familiar ranges. Moreover, it is up 50 basis points since the Fed’s first rate cut in mid-September 2024.
The stickiness in Treasury yields likely stems from ongoing fiscal debt concerns and expectations for abundant bond supply, compounded by persistent worries about sticky inflation.
“As the federal government becomes more deeply indebted, it must issue more bonds—increasing the supply of government debt in the market. Without a commensurate rise in demand from buyers, that additional supply could drive yields up and prices down on government bonds,” Fidelity explained.
Adding to this upward pressure are renewed expectations for a Bank of Japan (BOJ) rate hike and the continued rise in Japanese Government Bond (JGB) yields.
The ultra-low JGB yields seen throughout the 2010s and during the COVID helped suppress borrowing costs across many advanced economies by exerting downward pressure globally.
The dollar index has also become less sensitive to rate-cut expectations, reflecting a shift in market dynamics in which these easing signals are fully priced in. Additionally, the U.S. economy’s relative robustness is likely supporting the greenback, preventing significant declines despite hopes for looser monetary policy.
The downtrend in the dollar index, which began in April this year and tracks the greenback’s value against major fiat currencies, ran out of steam near 96.000 in September. Since then, the index has bounced, knocking the 100.00 handle a couple of times.
Taken together, the resilience in bond yields and the dollar index suggests a shift in market behavior. The old, straightforward playbook – where dovish Fed signals drive yields and the dollar down, boosting BTC and altcoins – may not be valid anymore. Stay alert!
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
More For You
Protocol Research: GoPlus Security
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence’s Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Trump-Backed American Bitcoin Plunges 40% on Heavy Volume, Dragging Hut 8 Lower by 12%
The collapse marks yet another disappointing Trump family crypto-related investment.
What to know:
- American Bitcoin (ABTC) tumbled as much as 50% on major trading volume on Tuesday on no apparent news.
- The decline spread to previously hot-handed Hut 8 (HUT), the majority owner of ABTC.
- A check of SEC filings show nearly all major holders are restricted from selling until 2026.
