Why a guaranteed 4.47% yield on $44 billion of US debt just raised the hurdle for Bitcoin

The US government sold $44 billion of seven-year debt on July 28, and buyers accepted it at a yield of 4.473%. That was 21.3 basis points above the 4.260% yield awarded at June’s Treasury auction.Investors could lend money to Washington for seven years, collect regular interest, and lock in a return approaching 4.5% before the Federal Reserve announced its next rate decision.Bitcoin offered no comparable promise. It pays no contractual interest, can lose several percentage points in a day, and requires investors to believe future appreciation will justify the added volatility.The Treasury auction therefore raised Bitcoin’s hurdle before Fed officials voted. Leaving rates unchanged could prevent an immediate shock, but BTC needed the central bank to make lower future yields believable.The Treasury auction wasn’t a buyer strikeThe Treasury borrows by selling bills, notes, and bonds at auction. Investors submit bids stating how much debt they want and the minimum return they will accept, and the government awards the securities at the yield required to sell the full offering.A higher clearing yield means buyers demanded more compensation. Inflation risk, expectations for Fed policy, h...