#Cryptocurrency prices are under pressure.#

The cryptocurrency market experienced a bull run in the final quarter of 2024, but rising global government bond yields are putting pressure on crypto prices. The US 10-year Treasury yield, the global benchmark, has climbed to 4.70%, near multi-year highs, and has risen by more than 100 basis points since the Fed first cut the federal funds rate in September. The UK has taken a more extreme action, with the 30-year gilt yield rising to 5.35%, its highest level since 1998. The yield has now climbed 105 basis points since the Fed first cut rates in September. The sharp rise in interest rates is not limited to the US and UK, with Germany, Italy, and Japan experiencing similar moves. In fact, the Japanese 10-year government bond yield has risen to 1.18% – a relatively small number, but the highest level in nearly 15 years. The rise in yields over the past few months did not seem to hinder the crypto price action, with Bitcoin and many other digital assets reaching record or multi-year highs in early to mid-December. The price action since then has been a different story, with Bitcoin, for example, falling more than 10% from its all-time high of $108,000 set three weeks ago, and several other major coins falling even further. There are always exceptions, and this time it is China, where yields have fallen sharply due to deflationary concerns. According to a post on X by the Kobeissi Letter, China is experiencing its longest period of deflation since 1999.