Why surging US real yields are quietly forcing Bitcoin under $84,000

Bitcoin registered an intraday low at $83,500 on Sept. 23, the same day the US 10-year Treasury yield closed at 5.11%, up 15 basis points in a single session, as a hotter-than-expected business activity survey pushed investors to reprice interest rates.

Bitcoin now sits inside the $84,000 to $85,000 zone Glassnode identifies as its nearest on-chain support.

Real yields carried most of the move

The 10-year real yield, which strips out expected inflation, climbed from 2.63% to 2.76% on Treasury's curve, accounting for 13 of the 15 basis points added to the nominal yield. Implied 10-year inflation compensation, the gap between the two, edged from about 2.33% to 2.35%.

Investors demanded a higher inflation-adjusted return on government debt, which raises the opportunity cost of holding Bitcoin, an asset that pays no yield of its own.

The trigger came from S&P Global's September Purchasing Managers' Index. The composite reading jumped to 58.4 from 56.0, with services at 58.7 and manufacturing at 57.0, the strongest expansion in the survey since July 2021.

An economy running that hot leaves the Federal Reserve less room to ease, one week on from its Sept. 16 hike to a 3.75% to 4.00% target range. Intraday reports put the 10-year near 5.058% within minutes of the PMI release, and Treasury's end-of-day curve settled at 5.11%.