Bitcoin (BTC) has closed its best third quarter since 2017 after registering a 43% increase in value, driven by the money-hedging narrative. However, macroeconomic pressure is resurfacing due to US Treasury interest rates hovering above 5%, a factor that is creating stiff competition for the price of digital assets.
This restrictive monetary policy scenario coincides with a slowdown in the job market in the United States, which adds volatility to the evolution of valuations in global financial markets.
The profitability of public debt and the struggle with risk assets
The crypto market has seen significant progress in recent months, but US Treasury yields above 5% pose a significant obstacle to sustaining Bitcoin's rise.After accumulating a 43% increase in the third quarter, the leading cryptocurrency in the market faces a situation where traditional state instruments offer high returns without the volatility inherent in the technology or digital sector.
According to industry analyses published in early October 2026, when US Treasury bond yields rise above that psychological threshold, institutional capital more rigorously assesses the opportunity cost before acquiring equity or crypto assets. Despite this context, Bitcoin's price briefly surpassed $87.000 last week before experiencing a tactical correction. This surge represents a rally of over 35% since mid-August, supported by consistent demand for structural hedges in a sustained inflationary environment.
The market response reflects that, although sovereign debt continues to attract some corporate liquidity, interest in diversifying reserves toward decentralized assets remains strong, especially among portfolios seeking to mitigate the progressive deterioration of traditional fiat currencies. You can follow these movements in the section on cryptocurrency news from Bit2Me News.
Trade against currency devaluation gains traction
One of the most notable catalysts to explain the behavior of Bitcoin The strategy against high interest rates is known as trading against devaluation (or debasement tradeThis thesis argues that the continued increase in fiscal debt and the constant expansion of the monetary balance end up eroding the real purchasing power of the dollar, which drives the appetite for assets with limited supply.
Industry experts point out that this strategy does not necessarily require a low interest rate environment to succeed. The focus is on the accumulated federal deficit and the substantial financial cost the Washington government faces in refinancing its sovereign debt. Since mid-August, the US Treasury has announced plans to double its long-term debt repurchase programs to inject liquidity and ease tensions in the 10- and 20-year bond market. These interventions, which later tripled their usual size, have been interpreted by traders as an implicit easing signal that benefits digital reserves.
In contrast to policies of mass issuance of conventional currency, Bitcoin is consolidating its position as an independent store of value, a topic widely analyzed in educational resources of Bit2Me Academy as in the current affairs analyses available in Bit2Me News to understand macroeconomic mechanics.
Weak jobs data and the Federal Reserve's halt to rate hikes
The outlook for tightening monetary policy has shifted following the release of US employment data. The US economy added just 29.000 non-farm payrolls in September 2026, significantly lower than the 80.000 jobs projected by analysts. This evident moderation in the labor market gives the US central bank more room to pause its tightening schedule.
The probability of another interest rate hike in October fell sharply to around 24%, after having been above 75% just a week earlier, according to futures market measurements. Several Federal Reserve spokespeople had already indicated a more cautious stance. Statements from senior officials, such as the president of the Federal Reserve Bank of New York, John Williams, emphasized that the measures taken at the September meeting prevent unnecessary haste in enacting further increases in the short term.
This macroeconomic cooling partially alleviates the financial cost borne by venture capital, giving investors a respite in their tactical management for the end of the year.
Implications of the MiCA framework on institutional adoption
While the United States navigates fiscal pressures and restrictive interest rates, the European continent is consolidating its operational framework through the implementation of the Markets in Crypto Assets Regulation (MiCA). This legislation provides legal certainty and defines the governance, custody, and transparency requirements that service providers in the sector must meet.
In this respect, the existence of clear regulations under MiCA encourages European Union investors to approach assets like Bitcoin through fully regulated environments, moving away from unsupervised platforms. European regulatory stability contrasts with US fiscal uncertainty, positioning registered operators as reliable intermediaries for managing corporate liquidity during times of international macroeconomic stress.
FAQ
Why do Treasury rates of 5% influence the price of Bitcoin?
Interest rates of 5% on US government bonds represent an attractive alternative with high theoretical returns for large capital managers. When sovereign assets offer this level of return, riskier instruments, including cryptocurrencies, must justify their adoption through higher potential for appreciation.
What does debasement trading mean in crypto markets?
Debasement trading is a strategy that involves acquiring scarce assets like Bitcoin to protect against the devaluation of fiat currencies. This loss of value typically stems from continued government spending, chronic fiscal deficits, and the expansion of the money supply by central banks.
How do US employment data affect the price of Bitcoin?
Job creation figures that fall short of expectations typically signal a slowdown in economic activity. This reduces the likelihood that the Federal Reserve will continue raising interest rates, which improves global liquidity and generally benefits cryptocurrency markets.
The struggle between high government debt rates and the search for protection against fiat currency depreciation continues to drive the cryptocurrency market. Despite the obstacles stemming from Federal Reserve policy, Bitcoin's resilience demonstrates the growing influence of structural factors on short-term macroeconomic fluctuations.
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
Generative artificial intelligence tools were used to create this article.
