The US 10-year Treasury yield touched 5.34% on Oct. 1, its highest since 2002, capping a third quarter in which it climbed almost 90 basis points, the largest quarterly rise this century. Bitcoin gained about 43% over the same three months and Ethereum about 71%.

Bitcoin trades in the mid-$80,000s , and the clearest evidence of the yield shock sits in the financing built around it.

The Federal Reserve's H.15 release for Oct. 1 put the 10-year at 5.29% , the 30-year at 5.64% and the 10-year real yield at 2.93%. Inflation-adjusted returns on government debt now compete with a coupon-free asset.

Bond yields climbed to new highs across the US, France, Germany, Japan and the UK, where 30-year borrowing costs reached 6% for the first time since 1998. Brent crude also moved back above $100 a barrel.

Against that backdrop, US-traded spot Bitcoin ETFs drew about $6.3 billion in the third quarter and Ethereum ETFs about $3 billion.

Citi raised its 12-month Bitcoin forecast to $113,000 from $82,000, citing stronger crypto activity, ETF inflows, and gradual adviser and brokerage allocations. Higher yields stayed a headwind , and other sources of demand outweighed it in the third quarter.

One quarter leaves the long-run relationship open, and ETF demand and adviser allocation shaped the outcome alongside yields.

On Sept. 23, a stronger PMI pushed yields higher, and Bitcoin slipped below $85,000, with $135.8 million of long liquidations in a single hour and $510 million over 24 hours.