Rising U.S. Treasury Yields Pose Risk to Crypto and Equities

iCapital’s 2026 Market Outlook reports the 10-year U.S. Treasury yield could range between 4% and 4.5%, potentially reaching the upper limit in the year’s latter half.

This yield increase could pressure risk assets, including equities and cryptocurrencies, as historical precedents show a correlation with market declines.

Key Developments, Impact, and Reactions

iCapital’s outlook report, under the leadership of CEO Lawrence Glazer, projects a significant trading range for 10-year U.S. Treasury yields by 2026 at 4% to 4.5%, suggesting an escalation during the year’s second half. Key market players worry about the effects of widening deficit forecasts, which are highlighted as potential catalysts for yield hikes. Crucially, these shifts emphasize potential ramifications for equities and cryptocurrencies, with possible weakening pressures.

No specific indicators of community sentiment or industry statements are directly associated with iCapital’s projections. However, a previous example saw the S&P 500 drop by approximately 5% when yields escalated around two standard deviations, underscoring the strength of market pessimism should yields rise. No major reactions from key figures like Vitalik Buterin or any industry regulators have been observed.

“We project the 10-year U.S. Treasury yield will be in a 4.0%-4.5% range for 2026, which may exert pressure on risk assets.” — Lawrence Glazer, CEO, iCapital

Bitcoin Faces Decline Amid Rising Treasury Yields

Did you know? U.S. Treasury yield increases have historically coincided with notable declines in the S&P 500, hinting at how current yield projections could affect equities similarly when they approach the upper range of 4.5%.

Data from CoinMarketCap shows Bitcoin (BTC) recently trading at $86,774.77, reflecting a decline of 3.83% over the past week and 3.30% over the last month. With a circulating supply of 19,963,612, Bitcoin’s market dominance stands at 59.50%. The cryptocurrency’s market cap is valued at $1.74 trillion.

Coincu’s research team suggests that broad financial pressures could arise if 10-year yields keep climbing. Such conditions might spawn shifts in investor strategies, with a possible re-evaluation of risk preferences among bonds, equities, and cryptocurrencies alike.