US 10-year Treasury yields fall to session low after auction, last at 4.362%

US 10-year Treasury yields fall to session low after auction, last at 4.362%

US 10-year Treasury yields fell to a session low of 4.362% on July 2, 2025, following a robust auction that saw demand significantly outstrip supply. The auction for $39 billion in 10-year Treasury notes was met with exceptional demand, with bids outstripping supply by over 2.5 times [2].

The auction's primary dealer takedown was a mere 9%, indicating robust buying from investors beyond primary dealers, both domestic and foreign. This strong demand comes despite a worsening US fiscal situation, with national debt exceeding $36 trillion and an annual deficit of $1.8 trillion [2].

The strong performance in the traditional debt market has temporarily challenged the narrative that investors are rotating out of government debt and into safe-haven assets like Bitcoin (BTC) and gold. However, traders are now watching an upcoming $22 billion 30-year bond sale for further clues on investor confidence, as continued strong demand for U.S. debt could act as a short-term headwind for BTC's price momentum [2].

The market's focus now shifts to the upcoming sale of $22 billion in 30-year bonds, which will serve as a further litmus test of investor sentiment. While this short-term strength in Treasuries is notable, it occurs against a backdrop of a worsening US fiscal situation, with national debt exceeding $36 trillion, or over 120% of GDP, creating a long-term bullish case for scarce assets like Bitcoin [2].

In the wake of the Treasury news, the digital asset market displayed a mixed but telling performance. While Bitcoin consolidated, Ethereum (ETH) mirrored this trend, with the ETHUSDT pair declining by 0.87% to approximately $2,531. However, the ETHBTC trading pair showed a slight gain of 0.59% to 0.02358, indicating minor outperformance against Bitcoin and suggesting some capital rotation within the crypto ecosystem [2].

The current market environment presents a fascinating conflict between short-term dynamics and the long-term macro outlook. On one hand, the attractive 4.421% yield on 10-year Treasuries and demonstrated market demand provide a compelling alternative for capital in the immediate term, potentially capping the upside for assets like Bitcoin. On the other hand, the long-term fiscal trajectory of the United States remains a powerful tailwind for Bitcoin. With a national debt of $36 trillion, a 2024 deficit of $1.8 trillion, and an annual debt servicing cost of $1 trillion, the sustainability of the current system is increasingly questioned [2].

Therefore, the current price action is best understood as a tension point: short-term traders are weighing Treasury yields against crypto's momentum, while long-term investors continue to see the growing US debt as a fundamental reason to allocate to Bitcoin, viewing periods of consolidation like this as accumulation opportunities [2].

References:
[1] https://www.cnbc.com/quotes/US10Y
[2] https://blockchain.news/flashnews/strong-10-year-us-treasury-auction-questions-bitcoin-btc-as-safe-haven-amid-debt-concerns
[3] https://www.fxstreet.com/news/us-treasury-sec-bessent-says-us-tariff-revenue-could-reach-300-billion-this-year-202507090051