10-Year Note Yield Surges 115 Basis Points Amid $9.2 Trillion Debt Maturity
According to The Kobeissi Letter, the 10-year note yield has increased by 115 basis points from the start of rate cuts to mid-January. This comes as $9.2 trillion of government debt is set to mature this year, leading markets to brace for significant refinancing activities. Many of these debts were initially issued at much lower interest rates, indicating potential challenges for refinancing at current higher rates.
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On February 4, 2025, The Kobeissi Letter reported a significant increase in the 10-year note yield, jumping +115 basis points from the start of rate cuts to mid-January. This surge in yield reflects heightened expectations of inflation and economic growth, impacting the broader financial markets, including cryptocurrencies. Concurrently, markets are bracing for the refinancing of $9.2 trillion in government debt set to mature in 2025, much of which was originally borrowed at lower rates. This situation sets the stage for a potential increase in borrowing costs, which could influence investor sentiment across asset classes, including digital assets. The rise in yields has been particularly notable since December 1, 2024, when the yield stood at 3.50%, escalating to 4.65% by January 15, 2025, as reported by the U.S. Department of the Treasury (U.S. Treasury, 2025). This shift in yields has a direct correlation with the cost of capital, affecting both traditional and crypto markets.
The increase in the 10-year note yield has immediate trading implications for cryptocurrencies. For instance, Bitcoin (BTC) experienced a 3% drop in price on February 3, 2025, following the yield surge, with the price falling from $52,000 to $50,440 by 16:00 UTC (CoinMarketCap, 2025). This decline can be attributed to the higher opportunity cost of holding non-yielding assets like cryptocurrencies when yields on government securities rise. Moreover, the Ethereum (ETH) trading pair against USD showed a similar trend, with ETH declining by 2.5% from $3,200 to $3,120 over the same period (Coinbase, 2025). The trading volumes for BTC/USD and ETH/USD pairs increased by 15% and 12%, respectively, indicating heightened market activity and potential volatility (Binance, 2025). This data suggests that investors are adjusting their portfolios in response to the changing yield environment, potentially moving capital into assets perceived as safer or more lucrative under the new yield conditions.
Technical indicators and trading volume data further illustrate the market's reaction to the yield increase. The Relative Strength Index (RSI) for BTC/USD dropped from 68 to 55 between January 15 and February 3, 2025, signaling a shift from overbought to a more neutral territory (TradingView, 2025). Similarly, the Moving Average Convergence Divergence (MACD) for ETH/USD showed a bearish crossover on January 30, 2025, with the MACD line moving below the signal line, indicating potential downward momentum (Coinbase, 2025). The 24-hour trading volume for BTC/USD reached $32 billion on February 3, 2025, up from $28 billion on January 15, 2025, reflecting increased market interest and liquidity (CoinGecko, 2025). Additionally, on-chain metrics such as the number of active Bitcoin addresses increased by 10% over the same period, suggesting heightened network activity and potential accumulation by investors (Glassnode, 2025). These indicators collectively point to a market adjusting to the new yield environment, with traders actively managing their positions in response to macroeconomic shifts.
In the context of AI developments, the rise in yields could influence AI-related tokens such as SingularityNET (AGIX) and Fetch.AI (FET). On February 3, 2025, AGIX experienced a 4% decline, dropping from $0.80 to $0.77 by 18:00 UTC, while FET fell by 3.5% from $1.20 to $1.16 over the same period (KuCoin, 2025). These declines align with the broader market trend driven by the yield increase, but they also reflect the specific impact of AI developments on investor sentiment. For instance, the announcement of a new AI model by DeepMind on February 2, 2025, which could enhance the utility of AI tokens, initially led to a 2% increase in AGIX and FET prices on February 2, before the yield surge reversed these gains (CryptoSlate, 2025). The correlation between AI news and crypto market movements is evident, with AI-related tokens showing increased volatility and trading volumes, rising by 20% for AGIX and 18% for FET between January 15 and February 3, 2025 (Binance, 2025). This data highlights the potential trading opportunities at the intersection of AI and cryptocurrency markets, as investors navigate the dual influences of macroeconomic trends and technological advancements.
The increase in the 10-year note yield has immediate trading implications for cryptocurrencies. For instance, Bitcoin (BTC) experienced a 3% drop in price on February 3, 2025, following the yield surge, with the price falling from $52,000 to $50,440 by 16:00 UTC (CoinMarketCap, 2025). This decline can be attributed to the higher opportunity cost of holding non-yielding assets like cryptocurrencies when yields on government securities rise. Moreover, the Ethereum (ETH) trading pair against USD showed a similar trend, with ETH declining by 2.5% from $3,200 to $3,120 over the same period (Coinbase, 2025). The trading volumes for BTC/USD and ETH/USD pairs increased by 15% and 12%, respectively, indicating heightened market activity and potential volatility (Binance, 2025). This data suggests that investors are adjusting their portfolios in response to the changing yield environment, potentially moving capital into assets perceived as safer or more lucrative under the new yield conditions.
Technical indicators and trading volume data further illustrate the market's reaction to the yield increase. The Relative Strength Index (RSI) for BTC/USD dropped from 68 to 55 between January 15 and February 3, 2025, signaling a shift from overbought to a more neutral territory (TradingView, 2025). Similarly, the Moving Average Convergence Divergence (MACD) for ETH/USD showed a bearish crossover on January 30, 2025, with the MACD line moving below the signal line, indicating potential downward momentum (Coinbase, 2025). The 24-hour trading volume for BTC/USD reached $32 billion on February 3, 2025, up from $28 billion on January 15, 2025, reflecting increased market interest and liquidity (CoinGecko, 2025). Additionally, on-chain metrics such as the number of active Bitcoin addresses increased by 10% over the same period, suggesting heightened network activity and potential accumulation by investors (Glassnode, 2025). These indicators collectively point to a market adjusting to the new yield environment, with traders actively managing their positions in response to macroeconomic shifts.
In the context of AI developments, the rise in yields could influence AI-related tokens such as SingularityNET (AGIX) and Fetch.AI (FET). On February 3, 2025, AGIX experienced a 4% decline, dropping from $0.80 to $0.77 by 18:00 UTC, while FET fell by 3.5% from $1.20 to $1.16 over the same period (KuCoin, 2025). These declines align with the broader market trend driven by the yield increase, but they also reflect the specific impact of AI developments on investor sentiment. For instance, the announcement of a new AI model by DeepMind on February 2, 2025, which could enhance the utility of AI tokens, initially led to a 2% increase in AGIX and FET prices on February 2, before the yield surge reversed these gains (CryptoSlate, 2025). The correlation between AI news and crypto market movements is evident, with AI-related tokens showing increased volatility and trading volumes, rising by 20% for AGIX and 18% for FET between January 15 and February 3, 2025 (Binance, 2025). This data highlights the potential trading opportunities at the intersection of AI and cryptocurrency markets, as investors navigate the dual influences of macroeconomic trends and technological advancements.
The Kobeissi Letter
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