Thursday saw the average 30-year fixed US mortgage rate climb 19 basis points, reaching 7.45%. This increase was captured in the daily lender and broker survey conducted by Mortgage News Daily.
This upward movement mirrors a wider selloff across US government bonds. Regarding cryptocurrency markets, the specific Treasury yield fueling that selloff delivers the most direct message.
Treasuries Drag the 30-Year Mortgage Rate Higher
CNBC data shows the 30-year rate had previously dropped to a low of 5.99% in late February. Its ascent started with the outbreak of the Iran war and gained further momentum following the Federal Reserve’s September rate hike.
Matthew Graham, Chief Operating Officer at Mortgage News Daily, attributed the upward trajectory since September 10 to three primary factors: statements from the Fed, rising oil prices, and robust economic reports.
That said, Graham noted that Thursday afternoon’s bond selloff lacked an obvious trigger.
“No obvious catalyst. Explanations require concocting narratives and then defending them. There’s no objective, irrefutable way to connect the dots today. Sellers decided to sell… a lot,” he said.
This selloff is significant because mortgage rates generally follow longer-term Treasury yields. Treasury figures show the 10-year yield finished Thursday at 5.18%, moving up from 4.96% on Tuesday.
The bond market decline was attributed to inflation by The Kobeissi Letter. The publication pointed to Brent crude trading above $105 per barrel alongside historic diesel prices, while highlighting that consumers anticipate inflation of roughly 4.6% over the coming year.
Crypto Pays the Price of Higher Yields
These yields serve as the primary transmission mechanism to the digital asset sector. As government debt offers higher returns, the opportunity cost of holding assets like Bitcoin (BTC) increases.
This dynamic was visible on Wednesday. Bitcoin dropped beneath $84,000 after upbeat US business activity figures propelled the 10-year yield above the 5% threshold.
According to BeInCrypto Markets data, Bitcoin was changing hands at $84,590 by Friday, registering a slight increase over the preceding 24 hours. Alternative cryptocurrencies experienced stronger recoveries during the same timeframe, with Solana (SOL) rising 2.2% and XRP (XRP) increasing by 3.4%.
Investors are now left wondering whether crypto buyers can sustain their resilience against a Treasury market yielding upwards of 5%.
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