According to The Kobeissi Letter, before the April 2nd announcement of reciprocal tariffs, the US 10-year Treasury note yield was declining steadily, which allowed the trade war environment to persist as rates fell (source: @KobeissiLetter, May 21, 2025). However, as the basis trade unwound amid increased volatility, the 10-year yield spiked to 4.50%, and it now stands even higher. For crypto traders, this sharp rise signals heightened risk-off sentiment in traditional markets, driving capital flows and volatility that may influence Bitcoin and altcoin prices. Historically, surging bond yields can lead to liquidity shifts that impact crypto market dynamics, particularly for leveraged trading and stablecoin demand.

According to The Kobeissi Letter, the 10-year US Treasury yield, which had been steadily declining before April 2nd's announcement of reciprocal tariffs, reversed course as basis trades unwound amid rising volatility. The yield surged past 4.50%, now sitting above that key level (source: The Kobeissi Letter, May 21, 2025). This sharp increase in yields signals tighter financial conditions, which historically pressures risk assets like Bitcoin and altcoins. Crypto traders should monitor US bond market volatility closely, as sustained high yields may drive further outflows from digital assets and increase market risk.