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The movement of the U.S. 10-year Treasury yield is often seen as a market verdict on the Federal Reserve’s interest rate policy. But according to market analysts, the long-term yield is primarily reacting to something else: the delayed realization that the U.S. economy cooled down much earlier than official figures suggested. And that has major consequences for bitcoin.
“The 10 Year Is Doing Exactly What a Late Cycle Bond Market Does”
“What the 10 year is reacting to now is completely different from what it was reacting to back in 2024, and that’s the part people keep missing. When the Fed first started cutting in September 2024, it happened right…”
— EndGame Macro (@onechancefreedm) November 23, 2025
A Distorted Picture of the Labor Market #
When the Fed began cutting rates in September 2024, the labor market still appeared strong. The primary reference was the monthly jobs report, which remained stable. However, this contained a significant distortion. For months, the Bureau of Labor Statistics (BLS) tinkered with the Birth/Death model, which estimates how many jobs are created at small firms.
In November 2024, the agency reverted to its pre-coronavirus model, a model that historically adds too many jobs around economic turning points.
On top of this, a strong wave of immigration led to a larger labor supply, making payroll figures appear more robust than the reality allowed. Together, these factors masked the weakness that was already clearly visible behind the scenes.
Revisions Erase Nearly 1.5 Million Jobs from the Statistics #
In 2025, this picture was completely corrected. The revision in February removed 589,000 jobs from the figures for the period up to March 2024. The bigger blow came in September 2025: a preliminary revision slashed another 911,000 jobs for the twelve months up to March 2025. It was the largest downward correction ever.
With one set of figures, the assumed resilience of late 2024 collapsed. What looked like a strong labor market turned out to be largely statistical noise and demographic distortion.
Why the 10-Year Yield Is Falling Now #
A year ago, investors saw rate cuts as a choice by the Fed, perhaps even premature. This put upward pressure on the long-term yield. But now, in late 2025, the situation is different: the rate cuts are seen as an acknowledgment that the cycle is already in a downward phase.
This is compounded by:
- the cessation of Quantitative Tightening as of December 1,
- layoffs and bankruptcies at recessionary levels,
- weakening growth in Europe and China,
- and historically large data corrections that expose the real economic weakness.
Investors are therefore looking less at the Fed’s policy rate and more at growth prospects. The long-term yield is no longer fighting the Fed but is anticipating an economy that is clearly cooling. The falling 10-year yield is therefore not a sign that “the worst is over,” but that the bond market is finally reacting to the real economy, not the flawed figures of a year ago.
Impact on Bitcoin’s Price #
The movement of the long-term yield also has a direct impact on bitcoin. The currency reacts strongly to changes in liquidity and macro expectations:
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Lower long-term yields mean easing financial conditions The decline in the 10-year yield lowers financing costs throughout the system. In previous cycles, this led to more risk appetite, which could support demand for bitcoin. But this time, the context is different: the falling yield reflects economic cooling, not a new growth impulse.
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Recession fears drive capital to safe and liquid assets In a classic recession, money first shifts to cash, government bonds, and short-term instruments. This often temporarily weighs on the bitcoin price, as investors reduce leveraged positions and pull liquidity from risky investments.
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In the long term, bitcoin benefits from falling rates and policy responses If the weakness in the economy persists, accommodative policy typically follows: lower interest rates, possibly new liquidity instruments. Historically, bitcoin, as an alternative monetary instrument with a fixed supply, has benefited from this, especially when bond markets signal structural tightening in the real economy.
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The data corrections undermine confidence in official statistics The massive downward revisions in the labor market strengthen the appeal of bitcoin as a neutral, non-manipulable monetary network. A system in which nearly 1.5 million jobs “disappear” through after-the-fact corrections fuels the narrative that traditional data institutions are not always reliable.
The Bottom Line: Short-Term Pressure, Long-Term Support #
The current decline in the 10-year yield fits a late-cycle bond market that is beginning to price in economic weakness. For bitcoin, this means:
- short term: higher volatility, risk reduction by investors, potential pressure on the price;
- long term: a more favorable monetary environment, more liquidity, and a strengthening of the narrative around scarcity and monetary independence.
Bitcoin therefore reacts not only to the Fed’s policy, but especially to what the bond market is saying: the cycle is turning, the economy is cooling, and liquidity will eventually return.