High long-term U.S. Treasury yields are making assets like bitcoin, which do not generate yields, less appealing.
By Omkar Godbole|Edited by Aoyon Ashraf16 min ago3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on How feasible is a $1 million bitcoin price? (Getty Images)Key insights:- Many high price predictions rely on the idea that investments will shift from gold and similar assets into bitcoin, neglecting the opportunity cost. As U.S. Treasury yields rise, non-yielding assets like bitcoin are less appealing.
- During the 2025 market surge, bitcoin's price compared to the 30-year Treasury yield did not reach new highs, contrasting with its dollar price.
- This price ratio has now fallen below a long-standing support line, indicating a bearish trend.
The prediction of bitcoin reaching $1 million is resurfacing.
Asset management firm Bitwise recently stated that bitcoin could hit $1.3 million in the next ten years. This prediction joins previous forecasts by figures like Brian Armstrong of Coinbase, Jack Dorsey from Block, and Cathie Wood from Ark Invest.
However, analyzing bitcoin's current price trajectory, especially when factoring in the "risk-free rate" typical in traditional finance, suggests these estimates might be overly optimistic.
The million-dollar target is largely contingent upon the assumption that bitcoin will capture a segment of gold's market cap or receive capital allocations from vast pools like global pension funds.
What many of these price targets fail to consider is the opportunity cost involved.
Every dollar invested in bitcoin is a dollar that is not earning interest from U.S. Treasuries, which are considered the closest to a risk-free return. Given the attractive returns currently offered by Treasury yields, will investments flow into bitcoin at the rate that some analysts predict?
This year, the yield on 30-year Treasuries surpassed 5%, the highest since 2007. This means that a dollar in bitcoin or any non-yielding asset is not earning that 5%. Many analysts have cited these high bond yields as a significant drag on bitcoin's potential recently.
These increased capital costs negatively impacted bitcoin during the 2025 market surge.
The disparity between bitcoin's dollar price and its price adjusted for the long-term capital cost, represented by the 30-year yield, illustrates this issue. In 2025, bitcoin's spot price peaked at $126,000, significantly higher than the previous cycle's peak of nearly $70,000. However, when measured against the 30-year yield, it fell short of its 2021 high, breaking a consistent trend of reaching new highs on this metric with each cycle since its inception.
BTC-to-U.S. 30-year yield. (TradingView)Moreover, this ratio has now completed a head-and-shoulders breakdown, a prominent bearish pattern in technical analysis.
This pattern consists of three peaks with intervening pullbacks, the middle peak being the highest, resembling a “head” flanked by two “shoulders.” A breakdown below the neckline connecting the pullbacks confirms this pattern, which the BTC/30-year yield ratio has achieved.
This isn't an obscure indicator.
Thus, the head-and-shoulders breakdown in the BTC-to-30-year yield chart indicates that further losses may be in store for the cryptocurrency, at least in relation to the long-term capital costs.
This analysis does not imply that bitcoin's dollar price cannot rise sustainably in the future. However, for seven-figure predictions to come true, the interest rate environment likely needs to shift back to the supportive levels seen in 2020-21.
Currently, the trend is moving in the opposite direction.
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