The same Fed rate hike can help stablecoins and hurt Bitcoin borrowers

Different rates reach different businesses through their contracts, so a bond-market move that discourages investors from buying speculative assets can also improve the income earned on some crypto reserves.

We can see this in Circle's second-quarter filing: reserve income supplied 95.2% of revenue in the three months ended June 30, 2026. Its reserve returns track close to the prevailing secured overnight financing rate (SOFR), leaving revenue heavily dependent on how many stablecoins are outstanding and what their backing earns.

The rate in that calculation is important because overnight returns and the 10-year Treasury yield can move differently. Treating both as the same price of money can leave you expecting a windfall at an issuer whose reserve income is actually headed in the other direction.

Money has more than one price

The Fed's Sept. 16 decision to raise its target range by a quarter of a percentage point, to 3.75%-4%, affected that split. Higher overnight rates can boost returns on short-term stablecoin reserves as assets mature or reset, while borrowers whose debt tracks those rates can face larger interest bills.

Short-term rates influence returns on instruments that mature or reset quickly, while a 10-year Treasury yield incorporates expectations about future short rates and compensation for holding a longer bond.