High interest rates have not been bitcoin’s friend in the past, and the benchmark 10-year U.S. Treasury yield recently reaching new generational highs comes at an especially inconvenient time for the cryptocurrency. Bitcoin’s price has held up in this year’s rising rate environment, but it’s also struggled to reach new highs, as investors seeking regulatory certainty in crypto remain on the sidelines. But it’s also primed to rip higher as crypto investors await the outcome of two key events – the approval of a bitcoin ETF and the Bitcoin halving that’s expected in the second quarter of 2024. But the key 10-year yield touching a 16-year high this past week casts an additional shadow over the crypto market, likely limiting any immediate, potential upside. “We continue to see high yields as a negative for bitcoin and in particular crypto more broadly,” said Needham analyst John Todaro. “While we think both [the ETF and the upcoming halving] are positive price catalysts, we do not see them as game changers … in order for bitcoin to reach new all-time highs, you will need easing monetary policy.” Federal Reserve Chairman Jerome Powell on Thursday acknowledged recent signs of cooling price pressures, but also said the central bank would be “resolute” in its commitment to its 2% inflation mandate. The central bank chief also left the door open for higher interest rates , saying he doesn’t think levels are currently too high. In the past, high yields have put pressure on crypto, giving investors fewer reasons to bet on high-risk assets such as bitcoin in the face of high yield, low risk assets like government bonds. “It’s going to be hard for bitcoin to really gain any upward momentum with rates and real rates continuing to back up,” said Rob Ginsberg, an analyst at Wolfe Research. “I like that it’s trying to base and find its footing above $25,000 support, which should resolve itself to the upside once the rate pressures subside.” “This move [on the 10-year] will eventually cause something in the system to freeze up or break, which will then lead to a strong rally in bonds and a reversal in rates,” he added. “I’ve been thinking later this year [or] early Q1.” Ginsberg has previously called bitcoin’s resilience a silver lining in an otherwise grim crypto market, where low trading volumes and liquidity seem to have recently gotten even worse . Callie Cox, an analyst at the investment company eToro, said bitcoin could actually continue to do well — partly as a result of high interest rates. So far, it’s up 78% in a year when the Fed has raised rates four times. “What’s benefited bitcoin the most has been flows out of altcoins from yield fears,” she said. “Bitcoin is seen as the safe haven of crypto, and you have a lot of crypto-centric investors out there who aren’t willing to sell out of the asset class entirely.” “Crypto seems to have a lot of positive catalysts ahead of it,” Cox added. “But yields are the storm cloud that’s lingering over the space. For now, I’d expect to see the flight to bitcoin continue, which could help support the price over the next few months.”