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Bloomberg senior analyst Mike McGlone said Bitcoin’s relative investment appeal could weaken if the U.S. 10-year Treasury yield rises to around 5% while stock market valuations remain elevated.
McGlone’s analysis focused on how the rate and Bitcoin price backdrop has changed sharply since 2021. Unlike 2021, when the U.S. 10-year yield was around 0.5% and Bitcoin was under $10,000, both the benchmark yield and Bitcoin’s price are now about 10 times higher, suggesting investment flows could move in the opposite direction from that period.
McGlone added that a comparison of the year-end ratio between U.S. stock market capitalization and public debt since 2001 shows the ratio fell to about 1.2 times in 2018 and 2022, when Bitcoin dropped about 70%. The ratio now stands at about 2.1 times. He said a gradual decline in stocks could become a factor that pressures both Bitcoin and interest rates at the same time. If stock prices and Treasury yields remain high instead, Bitcoin could lose relative appeal as a speculative asset as it competes with many other cryptocurrencies while offering neither cash flow nor interest income.