Mortgage and Loan Costs Surge as Treasury Yields Rise, Putting Pressure on Bitcoin

The US government has recounted the story of global financial tension through a dramatic surge in borrowing costs. The US 10-year Treasury yield has reached 4.27%, the highest level in four months, creating ripple effects across every corner of the financial markets—from housing mortgages to the cryptocurrency market. This increase marks a market momentum that is increasingly challenging for risky assets, including bitcoin, which is now experiencing significant selling pressure.

How Rising Yields Are Driving Mortgage and Other Loan Costs

The 10-year Treasury bond yield acts as the foundational pricing benchmark for the entire global financial system. When the US government has to pay higher interest to borrow money through near-risk-free bonds, the entire chain of borrowing costs moves upward. Banks and lenders use this Treasury rate as a benchmark, then add risk premiums on top to determine their loan prices.

As a result, when the Treasury yield rises to 4.27%, the financial burden is directly felt by millions of borrowers. Residential mortgages, which were previously more affordable, now carry higher interest rates. Corporate loans for businesses seeking expansion also become more expensive, as do auto loans, student loans, and every other form of financing. This financial tightening, known in market terms as “financial tightening,” fundamentally alters the investment landscape worldwide.

Recent data shows that long-term borrowing costs have reached their highest level in four months, posing significant hurdles for businesses and financial markets. Major countries like China and Japan, which are primary buyers of US Treasury bonds worth trillions of dollars, now face more difficult choices in their capital allocation.

Increasing Pressure on Bitcoin and Other Risk Assets

As financing conditions tighten, investors tend to abandon high-volatility assets. Bitcoin, which offers the potential for high returns but with excessive risk, has become one of the first casualties of this changing market sentiment.

Since the rise in Treasury yields, bitcoin has fallen to $88,050, with a 24-hour decrease of 2.59%—down from the previous level of $91,000. This decline is not just daily fluctuation but reflects a shifting risk appetite in the global market. When mortgages and other loans become more expensive, investors prefer “risk-free” instruments like Treasury bonds over buying cryptocurrencies or stocks.

Futures contracts tracking the Nasdaq index, dominated by tech companies and startups, also declined by more than 1.6%. This indicates that the pressure is not limited to cryptocurrencies but affects the entire high-risk market segment.

On-chain data reveals that about 63% of bitcoin invested wealth has a cost basis above $88,000. Currently, with bitcoin trading at $88,050, these positions are at breakeven, creating potential selling pressure. The high concentration of supply between $85,000 and $90,000, combined with thin support below $80,000, suggests ongoing volatility.

What Is Driving the Rise in Treasury Yields?

The root of the yield increase is a combination of policy threats and geopolitical concerns. President Donald Trump has issued an aggressive tariff ultimatum to Europe: a 10% import duty starting February 1 on imports from eight European countries, with a threat to increase to 25% on June 1 unless Europe approves the US acquisition of Greenland—a scenario considered difficult to realize.

There are concerns that Europe could respond by selling their US assets worth $12.6 trillion, including Treasury bonds and stocks. If a large-scale Treasury sell-off occurs, bond supply would increase, pushing yields higher (since bond prices and yields move inversely). However, analysts note that this scenario is easier to talk about than to execute, as most assets are held by private actors rather than European governments.

Inflationary pressures and fiscal concerns also play a role. In Japan, government bond yields have continued to rise in response to Prime Minister Sanae Takaichi’s plan to cut taxes on food—a move that could increase fiscal deficits. The surge in yields across advanced economies indicates that markets are factoring in higher fiscal spending and increased bond supply in the future.

Double Impact: When Mortgages Get More Expensive and Bitcoin Comes Under Pressure

The combination of rising borrowing costs (including mortgages) and pressure on risky assets creates a challenging environment. For households, more expensive mortgages mean less purchasing power for property or more affordable refinancing. For investors, it means reconsidering portfolios heavily weighted in speculative assets like cryptocurrencies and tech stocks.

The central question is how long the rise in Treasury yields will continue and whether Bitcoin can find stable support at current price levels. On-chain data shows significant support below $80,000, far from current prices, indicating further declines may be possible if bearish momentum persists.

Conclusion

The rise in US Treasury yields is not just an academic issue for economists—it’s a reality felt directly through higher mortgage costs, heavier corporate borrowing, and pressured cryptocurrency portfolios. Bitcoin and other risky assets are now facing headwinds from geopolitical shifts, expansive fiscal policies, and increasingly tight global financing conditions. Until this macroeconomic climate changes, the pressure on bitcoin and risk assets is likely to remain a dominant narrative in financial markets.