Here's how U.S. Treasury notes could shape Trump's Iran war and bitcoin
Treasury yields and swap spreads reaching critical levels could pressure the Trump administration to moderate the conflict with Iran.Summary
The ongoing conflict with Iran has caused U.S. Treasury yields to surge, pricing in delayed Fed rate cuts and higher inflation. Analysts, including those at ING, suggest that the market's reaction, specifically when the 10-year U.S. Treasury swap spread blows past 60 basis points (currently near 50bp), could signal enough trouble to force the Trump administration to moderate the war due to the increased cost of funding U.S. debt.
Other observers focus on the 10-year Treasury yield, which has risen about 45 basis points since the war began, hitting 4.37%. The Kobeissi Letter notes that the 4.5%–4.6% range is a critical threshold, as President Trump previously paused sweeping tariffs when the yield breached this level in April 2025. If the yield breaks above 4.6%, it could reach 5%, a level considered unsustainable for the U.S. economy by some analysts, potentially triggering a mini-financial crisis that might necessitate Fed liquidity injections.
This financial pressure directly impacts risk assets like bitcoin; while an initial knee-jerk drop might occur if yields hit 5%, subsequent liquidity injections could boost crypto. Therefore, bitcoin traders must closely monitor Treasury yields and swap spreads as indicators of both risk appetite and potential shifts in U.S. policy regarding the Iran conflict.
(Source：CoinDesk)