Strategy's Michael Saylor Blames These 3 Factors for Bitcoin's Recent Sluggish Performance. The Most Important Is Treasury Yields.
When safe investments yield more, riskier investments aren't as attractive.
Michael Saylor, Executive Chairman of Strategy (MSTR -7.84%), has identified three factors inhibiting Bitcoin's recovery from its recent bear market. The most significant of these is rising Treasury yields. Saylor made this assertion during a recent investor day, arguing that Bitcoin is essentially "pure capital" and tends to decline more than stocks in a risk-off environment.
He attributed Bitcoin's sluggish performance to trade policy, rising Treasury yields, and a substantial $1 trillion investment in artificial intelligence (AI) build-out. The factors all sap the pool of money willing to invest in a volatile asset like Bitcoin, which does not offer a yield like bonds do. The recent jump in 10-year Treasury yields, which reached close to 5% as of October 30, is a stark comparison to the relatively stagnant 10-year breakeven inflation rate, which has barely moved at about 2.3% over the same period.
This discrepancy suggests that investors are placing their faith in the safety and real yield of Treasury bonds over Bitcoin's absence of yield and lack of government support. Furthermore, the Federal Reserve is expected to tighten monetary policy again before the end of 2026, further bolstering the appeal of safer bonds relative to Bitcoin.
While Saylor's company has paused its Bitcoin purchases, the premium services from The Motley Fool suggest that buying Bitcoin could still be a viable strategy for those willing to hold it for at least five years, provided their portfolio is adequately diversified with safer investments.
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