US Treasury yields hit a record high, Bitcoin rebounds above $79,000

According to TechFlow, on September 12, data from Cointelegraph showed that Bitcoin (BTC) rebounded above $79,000 amid volatility on Friday, briefly dipping to $76,000 during trading before quickly surging more than 3%. The U.S. Consumer Price Index (CPI), released earlier, showed that core inflation rose 0.3% month-over-month in August, exceeding the market expectation of 0.2%; headline inflation came in at 3.4% year-over-year, broadly aligning with forecasts. Fueled by positive sentiment, U.S. equities rallied in tandem, with the S&P 500 Index and Nasdaq Composite gaining approximately 1% each.

Meanwhile, U.S. Treasury yields experienced significant volatility. After the CPI data was published, the 30-year Treasury yield spiked to its highest level since June 2004 before pulling back to 5.309%. Strong economic data and rising yields prompted traders to increase hedging positions; according to CME Group data, the odds of the Federal Reserve hiking rates by 25 basis points at its September 16 meeting have risen to 85%, up sharply from a week prior.

Regarding the impact of a high-yield environment on crypto assets, trading firm QCP Capital issued a warning, pointing out that the current 5% risk-free rate presents a severe challenge for Bitcoin. The firm considers a "high-yield" regime devoid of nominal growth momentum to be the "worst-case scenario" for Bitcoin, which could directly undermine the structural liquidity narrative that previously propelled price gains.